Final draft: premium sharing program implementation recommendations

Final DRAFT
Premium Sharing Program
Implementation Recommendations
Recommended by:
The AHCCCS Premium Sharing
Demonstration Project
Implementation Committee
January 9, 1997
MEMO
TO: Members of the Premium Share Demonstration Project Working Committee
FROM: Representative Laura Knaperek
DATE: January 7, 1997
-
RE: DRAFT Recommendations report and legislation
Please find attached a copy of the DRAFT recommendations for the premium sharing
demonstration project. As you know we have been working very long and hard on these
recommendations and I look forward to discussing and finalizing them on January 9, 1997.
Although we have not finalized the recommendations, I have instructed staff to put together a
very preliminary DRAFT bill which is also enclosed. It is intended to be a working copy and
your input and suggestions are needed.
Thank you for all your hard work and dedication to this issue. I look forward to completing our
mandate with all of you who have participated in the planning and development of this draft.
Table of Contents
Background ......................................................................................... 1
. . Findings ................................................................................................ 3
Recommendations. ................................................................................... 5
Proposed Legislation .................................................................................... 11
Appendices
A. Laws 1996, Chapter 368 ( HB 2508)
B. Summary of Tobacco Tax Accounts
C. AHCCCS Premium Sharing Proposal Estimated Impact, William
Mercer, Inc.
D. Federal Poverty Levels
E. Poverty Levels and Percent of Income Table
House Bill 2508 and Senate Bill 1219 were introduced during the second regular session of the Forty-second
Legislature ( 1996). When combined into a single plan. the legislation proposed the creation
of a premium sharing program to provide uninsured low income and chronically ill individuals with
access to health care services. Both plans required participants to share the cost of the premium with
the state. The state portion was to be fbnded using the 1994 voter approved tobacco tax revenues.
Both proposals required Arizona's existing Medicaid providers ( AHCCCS providers) to deliver the
health care services.
As introduced. SB 12 19. sponsored by Senator Day. allowed individuals with a chronic illness who
had been classified as MNM eligible for the preceding twelve consecutive months and their eligible
f d y members to continue to receive AHCCCS benefits through participation in a premium sharing
program. The goal of the proposed program was to ensure that indivduals who have a chronic illness
maintain continuous access to health care services.
As introduced, HB 2508, sponsored by Representative Knaperek and Representative Weiers, required
most individuals in the MNM program to pay a portion of the cost of the premium paid by the state
to entities that provide health care services to MNIMI recipients. Additionally, since much of the
burden for funding the MNM progranl was being removed from the state, the bill proposed that
additional persons be made eligible for the program.
Neither HE3 2508 nor SB 12 19 passed in their original form. After much discussion. a compromise
was reached. The conlpromise legislation, amended onto House Bill 2508, combined the provisions
of both bills. Laws 1996, Chapter 368 ( HB 2508) established the Arizona health care cost
containment system premium sharing demonstration project implementation committee. The
legislation required the committee to make recommendations to the governor and the legislature
regarding the inlplenlentation of a prenlium sharing demonstration program to begin October 1, 1 997.
Using the provisions of the original HB 2508 and SB 12 19 as the primary framework, the committee
was directed to make recommendations for the program including who would be eligible to
participate. The demonstration program was to allow eligible persons access to medical services
provided by system providers through a cost- sharing arrangement with the AHCCCS administration.
The committee was directed to recommend eligibility criteria based on household income,
citizenship. residency, insurance status. and resources.
Members of the premium sharing demonstration project implementation committee are:
Senator Brewer and Representative Knaperek. co- chairs. and Senator Patterson, Senator Kennedy,
Representative Weiers and Representative Horton. At the first meeting, the committee members
decided to fornl two working groups: one to make recommendations regarding the service package
and the other to make recommendations regarding the structure and administration of the premium
sharing demonstration project. The working groups held more than twenty public hearings. Experts
from the public and private sector were invited to actively participate in the creation of the
implementation plan. Individuals representing private organization, public agencies and themselves
participated in the working group meetings. Participants included representatives fiom:
APIPA
APS
Arizona Association of Behavioral Health Programs
Arizona Association of County Health Centers
Arizona Association of Managed Care Plans
Arizona Consortiun~ fo r Children with Chronic Illness
Arizona Health Care Cost Containment System
Arizona Hospital Association
Arizona Medical Association
Arizona Physicians
Arizona Podiatric Medical Association
Arizona Public Policy Forum on Transplantation
Children's Action Alliance
Children's Health Care Coalition
Department of Administration
Department of Economic Security
Department of Health Services
Department of Insurance
Health Care Group
Legislative Council
March of Dimes
Maricopa County
NFIB
Samaritan Health Systenl
St. Joseph's HospitaVMercyCare
University Medical Center
The committee and working groups focused on eligibility requirements, contents of the service
package, premium rates and delivery systems. When reviewing eligibility criteria for project
participants, the committee specifically reviewed incomes at or below 300% of the federal poverty
guidelines. The committee reviewed a number of service packages including those provided for state
employees, health care group, AHCCCS MNIMI and AHCCCS Title XIX mandatory services, the
basic benefit package, and benefit packages provided by other states that have premium sharing
programs. When reviewing packages provided by other states. the committee noted that some other
states had reduced their benefit package after implementing their premium sharing program. This was
done to reduce the individual cost of running the program thus allowing more indivduals to
participate. The various delivery systems the committee reviewed were those provided through
AHCCCS, the Department of Insurance and Health Care Group. Additionally, the committee
directed the Arizona health care cost containment system administration to conduct an actuarial study
to provide estimates relating to presentation rates and potential premium sharing costs based on
parameters set by the conunittee.
In Arizona approximately 600,000 adults and children are without health insurance. Adults make
up the largest uninsured population ( 450.000) and children make up the remainder ( 150.000).
October 1996 Flinn Foundation
Since 1989. the number of uninsured Arizonans increased by 33%, out pacing the state's
estimated population growth of 2 1 %. Octokr 1996 Flinn Foundation
The predominant characteristic of the uninsured is low income, and not lack of employment.
About 85% of Arizona's uninsured adults. and 92% of uninsured children, live in households with
an employed main wage earner. October 1996 Flinn Foundation
About 75% of Arizona's 450.000 uninsured adults had been without health insurance for at least
two years at the time of the survey. October 1996 Flinn Foundation
Most uninsured persons cite the cost of insurance as the reason they do not have it. October 1996
Flinn Foundation
Roughly 100 million Americans suffer fi- om chronic illnesses such as diabetes, heart disease or
arthritis. Most of the chronically ill ( 84.4 million) are between the ages of 18 and 64. November
12. 1996 Journal of Amcrican Mcdicinc
On average, chronically ill patients incur annual medical bills that are more than triple the medical
bills incurred by people without chronic illnesses - $ 3.074 per person compared to $ 817.
Chronically ill individuals account for four out of five days spent in hospital admissions. November
12. 1996 Journal of American Mcdicinc
For 1998. it is prqjected that most of the uninsured adults and children will live in households
with an income that is less than 200% of the FPL. Octobcr 1996 FIinn Foundation
Many other states such as Hawaii. Minnesota. New Jersey, Florida, Oregon. Rhode Island,
Vermont. Tennessee, Pe~ lsylvaniaa nd Washington have premium sharing programs that provide
health insurance coverage to low income families and require participants to contribute a portion
of the premium.' The state subsidizes the remaining portion of the premium. AIICCCS SUN^!:
7- 1998 Projected Unins ured Populations
Total 1 271,000 1
O/ O of Federal
Poverty Level
Sources: AHC'CC'S, C'urrent Populations Survey, I
Children Under 21
Number O/ O
Recommendations
7.52
5.56
5.46
7.26
3.05
2.09
3.03
33.99%
I. Administration
Adults
Number %
A. Health Care Group shall be the entity responsible for administrative functions
related to the Premium Sharing Program such as collecting the participants
premiums, billing, processing, dis- enrolling members who are delinquent on their
payments and collecting member data.
Total
Number %
1993, 1994, 1995; C'urrent Population Reports, The Bureau of the Census.
95,000
51,000
85,000
82,000
57,000
49,000
106,000
525,000
Health Care Group ( HCG) has experience in administrating a program with similar
responsibilities and HCG administrators indicated that they are able to carry out this
recommendation.
B. The demonstration project shall be conducted in the following four counties:
Maricopa, Pima, Pinal and Cochise.
11.97
6.35
10.74
10.32
7.14
6.19
13.30
66.00%
HE3 2508 requires the demonstration project to take place in two urban counties and two
rural counties.
11. Eligibility
155,000
95,000
129,000
140,000
81,000
66,000
130,000
796,000
A. The program shall have two components: one for participants who do not have a
chronic illness and one for participants who do have a chronic illness. All
participants shall undergo an income test. To be eligible for the premium sharing
19.49
11.91
16.20
17.59
10.19
8.28
16.33
99.99%
program, household income for participants who do not have a chronic illness shall
be less than 200% of the FPL; household income for participants with a chronic
illness shall be less than 400% of the FPL. Chronically ill participants with a
household income between 200% and 400% of the FPL shall pay the full cost of their
premium. Chronically ill participants shall be required to have been on the MN/ MI
program for a period of at least one year after which they may apply for the
premium sharing program. The demonstration project shall include a cap of 200
persons for the chronically ill population. Once a participant has been determined
to be eligible for the program, the person's family is also considered eligible.
HB 2508 requires the Committee to establish a Premium Sharing Demonstration Program.
Persons who fall below 300% of the FPL may be eligible for the Demonstration Project.
Of the 1998 projected uninsured population, over 65% ( 530,000 individuals) are below
200% of the FPL. Since it is estimated that the Demonstration Project will serve
approximately 12,000 to 14.000 individuals. the committee decided to limit participation
to persons with an income of less than 200% of the FPL.
Although no state data exists that demonstrates the number of chronically ill persons in
Arizona. national data shows that roughly 100 million Americans suffer fiom chronic
illnesses such as diabetes. heart disease or arthritis. This attributes to about 84.4 million
individuals; most are between the ages of 18 and 64. Because of the costly nature of
chronic illnesses and the devastating affect they can have on a family's economic standing,
the committee recommends that the income level be increased to 400% for participants
who suffer from a chronic illness.
B. Income shall be calculated by multiplying by four the applicant's income for the
three months immediately prior to the application for eligibility.
For continuity and ease of administrative operation, the income test process should be
similar to the income test currently being conducted by eligibility workers. Therefore, the
income test calculation shall be similar to the MNIMI income test.
C. Employment shall not be a requirement for participation.
Since household income is the test of eligibility and not a person's employment status,
employment shall not be a requirement. Recent studies indicate that about 85% of
Arizona's uninsured adults. and 92% of Arizona's uninsured children. live in households
with an employed wage earner.
D. In order to be eligible for the demonstration project participants shall not have
access to other health care programs.
Since the goal of the demonstration project is to provide health care coverage to the
working poor and to individuals who otherwise have no access to coverage. persons who
are eligible for other government subsidized health care programs shall be ineligible for the
demonstration project.
E. Eligibility shall be determined according to presumptive eligibility criteria which
means information collected by the applicant is presumed to be accurate and
truthful, with minimal verification. Participants who falsify information in order to
qualify for the program shall be responsible for all fraudulent claims and
immediately disqualified from the program.
Participants shall be obligated to provide specific information in order to determine
eligibility however, an overly administrative intensive eligibility process could be costly and
burdensome.
F. Eligibility may be conducted at the following locations:
1) County sites;
2) DES locations;
3) Community Health Clinics ( conducted by DES workers).
Since the counties. DES and the community health clinics currently conduct some type of
eligibility process, they have the expertise and experience for conducting eligibility.
According to the county, approximately 45.000 applicants for state and county health
programs are denied eligibility each year; fifty percent are denied because they are over
income. Many of these individuals may qualifj and may be interested in participating in
the premium sharing program.
G. Participants shall demonstrate that they have gone " bare" ( had no health care
coverage) for a period of at least twelve months in order to be eligible for the
demonstration project except for AHCCCS members who transfer to the Premium
Sharing Program. Additionally, criteria shall be established specifying alternative
" bare" periods according to the participant's circumstance.
HB 2508 requires an individual to go bare for a minimum of six months before becoming
eligible for the Premium Sharing Demonstration Program. Criteria shall be established
determining the necessary bare period according to the participants condition. Moving
the AHCCCS recipient to the Premium Sharing Program without a break in health care
coverage provides continuity of care, encourages self- sufficiency and empowers the
participant to improve employment opportunities. Furthermore. flexibility of the " bare"
period shall be offered according to the participants special circumstance.
H. Participants shall undergo a financial evaluation evew twelve months to determine
program eligibility and a financial review after six months.
A twelve month eligibility period was justzed with a six month eligibility review. This will
assist in minimizing the administrative costs while assuring those eligible remain in the
program and those ineligible are removed or pay the full premium.
I. Participants who voluntarily leave the Premium Sharing Program shall not be
eligible to re- enroll for a period of 12 months.
To prevent individuals tiom joining the program only when they are sick and leaving when
they are well, a waiting period must exist. This will attract people who desire ongoing
health care coverage regardless of their current medical condition.
J. An enrollment cap shall be placed on the demonstration project.
Enrollment shall be limited during the demonstration project phase so that annual premium
expenditures by the state for the program do not exceed the annual appropriation to the
program.
Quality Review
A. AHCCCS shall conduct the quality review process and shall determine whether the
counties' eligibility determinations are accurate and timely.
AHCCCS currently conducts quality review and this review process could be extended to
each entity performing eligibility determinations for the Premium Sharing Program. In
addition. since AHCCCS health plans are the insurers for this program AHCCCS's quality
of care review could be extended to this program.
B. An evaluation of the Premium Sharing Demonstration Program shall be conducted
by Legislative Council.
The final version of HB 2508 did not contain language addressing how the program is to
be evaluated. A suggested process is as follows:
1. The AHCCCS administration shall prepare an annual report of the progress and
problems incurred relating to the program start- up. administration and expenditures
for the Joint Legislative Committee fbr the Arizona Health Care Cost Containment
System ( a statutory legislative committee).
2. During each year of the demonstration project, the Legislature should direct the
Legislative Council to report on program effectiveness, efficacy, participant
satisfaction. enrollment dormation. expenditures. and progress in reducing the
number of uninsured people in Arizona.
Legislative Council has been an active participant in the development of the Demonstration
Project and has told the committee it would be willing to take on these program evaluation
responsibilities.
IV. Service Package Recommendations
A. Premium sharing participants shall be provided with the same benefit package
offered to the medically needy population with the following exceptions:
I) Transplants shall be excluded;
2) Limited behavioral health services shall be provided with a maximum of ten days
of inpatient behavioral health services annually; and
3) Participants shall be charged a copayment for each visit to the doctor.
After completion of the initial phase of the demonstration project the committee
shall review the possibility of adding additional services such as transplants.
The Working Group reviewed in detail the benefits provided through AHCCCS. Health
Care Group. the state employees benefit packages and the Basic Benefit Plan. After much
discussion, the working group recommends that the Premium Sharing Demonstration
Project benefit package be based on the MNM services package with some exceptions.
B. The AHCCCS health care delivery system and existing providers shall be used for
the method of providing health care services.
The working group debated the benefits of using an established program vs. creating a new
program to deliver services. In order to provide a comprehensive package to the largest
number of people while maintaining administrative costs, the program should use an
already established program to deliver its services. Thus, the AHCCCS health care
delivery system was selected.
One problem with using Health Care Group is that to provide services to Health Care
Group, a health plan must be a contractor with AHCCCS. The number of health plans
contracting with AHCCCS ( 14 providers/ 457,798 participants) is much larger than in
Health Care Group ( 4 prot. idersl32.900 participants). Concern was raised as to whether
or not the existing Health Care Group providers could cover an additional 12.000 - 14,000
individuals. In some rural areas. in particular. very few individuals currently participate in
Health Care Group. Additionally. Health Care Group does not provide coverage for
numerous pre- existing conditions until a person has been in the program for twelve
months. Pregmancy related care is not covered during the first ten months of enrollment.
The working group strongly recommends that pregnancy- related care be provided
immediately upon enrollment and that exclusion of pre- existing conditions be carefully
reviewed.
The Basic Health Plan is a guide that details the minimum components that must be
included in a benefit package ofEered in Arizona. It does not have a dedicated delivery
system like AHCCCS or Health Care Group.
C. AHCCCS contract providers who choose to deliver services to the demonstration
project participants shall develop a marketing plan to promote the program.
In order to enhance the enrollment and encourage marketability of the Premium Sharing
Program and to provide coverage to a maximum number of participants. providers who
serve the program participants must develop a marketing plan to promote the program.
This will ensure the program is publicized and healthy individuals are given the opportunity
to participate.
D. Pregnancy should not be considered a " pre- existing condition" for the purpose of
refusing services. There should be some flexibility when determining pre- existing
conditions.
Pregnancy- related care should be provided as early as possible. Thus, any plan that is
selected should provide such care from the time an individual enrolls in the program.
The working group expressed concerns about coverage for persons with pre- existing
conditions. While not identlfLing those that should be covered immediately, the group felt
that if some conditions were excluded fiom coverage. at the very least there should be
some flexibility for exceptions. Chronically ill individuals and individuals who are receiving
services through AHCCCS were two groups that were mentioned as " exceptions" to the
rule.
E. Participants shall be required to enroll their whole family; enrolling only one child
or one family member shall not be permitted.
In order to encourage healthy people to enroll in the demonstration pro- ject rather than to
wait until one person in the hmily becomes ill and dependant on health care services. the
whole household shall be required to enroll.
V. Premiums
A. The AHCCCS administration shall establish the total premium costs and shall
determine the premium that each enrollee shall pay based on the enrollee's gross
income and household size. The premium shall not exceed four percent of the
enrollee's household gross income.
HB 2508 required AHCCCS to contract with an actuarial to assist the committee in
developing premium rates. As a result. AHCCCS contracted with William Mercer Inc. to
analyze the Premium Sharing Demonstration program given the current parameters and the
target population. Mercer has developed preliminary rates ( see appendix C) for the
demonstration project. Therefore, the rates for the premium sharing program shall resemble
the rates developed and presented to the working group on December 1 1, 1996.
After reviewing the various incomes and different household sizes the working group engaged
in a long discussion of affordability and recommended that the premium rate for the e t i t b k e
not exceed 4% of the participant's gross income.
DRAFT LEGISLATION
Note: This draft has not been reviewed by Legislative Council. Technical and conforming
changes are necessary.
DRAFT
AN ACT
ESTABLISHING THE PREMIUM SHARING DEMONSTRATION PROJECT
Be it enacted by the Legislature of the State of Arizona:
Section 1. Premium Sharin- g Demonstration Proiect: Implementation Requirements
A. Beginning October 1. 1997, the premium sharing demonstration project shall be
implemented to provide uninsured persons access to medical services provided by providers
through the Arizona health care cost containment system administration. Eligible persons shall be
required to pay a copayment and a monthly premium to obtain access to such medical services.
The premium sharing demonstration project h d , established pursuant to 36- 2923. Arizona
Revised Statutes, shall be used to subsidize portions of the enrollee's total premium costs. The
total amount of state monies that may be spent in any fiscal year by the administration for the
premium sharing demonstration project shall not exceed the amount appropriated or authorized
by section 36- 2923, Arizona Revised Statutes. Enrollees who meet the eligibility requirements
shall receive medical services if they pay the required monthly premium costs minus the state
subsidized amount. pay all of their copayment charges. and comply with all other provisions of
this section.
B. The director of the Arizona health care cost containment system administration shall
administer and implement the demonstration project The director has hll operational authority
and shall use health care group, established pursuant to 36- 2912, Arizona Revised Statutes, to
carry out the administrative hnctions of the demonstration project and shall:
1. Establish a process for billing. collecting the enrollee's copayments, and monthly
premiums.
2. Maintain enrollee data information.
3. Establish an aggressive dis- enrollment process for enrollees who default on paying
premiums or do not comply with premium payment deadlines. The administration shall
permanently remove an enrollee from the project if the enrollee fails to make the required
payments within a specified period of time as prescribed by this section. The administration may
adopt rules that allow for temporary probationary status for enrollees whose payments are
delinquent more than three months.
4. Establish a system for tracking enrollee's copayment collection and noncollection.
C. For the purposes of this section, " enrollee-' means a resident of this stateand the
Maricopa, Pima. Pinal or Cochise counties pursuant to 35- 2903.01. who is a citizen of the United
States and meets the alienage requirements that are established pursuant to title XIX of the social
security act and who:
1. Has been determined as an ineligible person pursuant to section 1 1- 297 or 36- 2901
subsection 1. Arizona Revised Statutes.
2. Submits an application for the premium sharing demonstration project as prescribed by the
administration.
3. Has an annual household gross income that does not exceed two hundred percent of the
federal poverty guidelines as published annually by the United Sates Department of Health and
Human services. Persons who are chronically ill and uho have been eligible for health care
services pursuant to 11- 297 or 36- 2905. Arizona Revised Statutes for twelve consecutive months
may have a household income that does not exceed four hundred percent of the federal povertj
guidelines as published annually by the United Sates Department of Health and Human services.
Chronically ill persons who have incomes between two hundred percent and four hundred percent
shall pay the full premium. No state subsidy shall be contributed to share in the cost of an!
enrollee whose gross income exceeds two hundred percent of the federal poverty guidelines as
published annually by the United States Department of Health and Human services.
4. Demonstrates that the enrollee has not been insured by a health care program at any time
during the twelve months preceding the date of application. This paragraph does not apply to an)
applicant who has been disenrolled pursuant to section 1 1- 297 or 36- 2901. at the time of
redetermination.
5. Agrees to share in the cost of the premiums established by the Arizona health care cost
containment system administration pursuant to subsection H of this section.
6. Agrees to cooperate fully with the administration in the determination of household
income for the purposes of determining gross income and premium costs.
7. Not receive social security or supplemental security income payments associated with
blindness or disabilit) .
8. Be ineligible for coverage throug the veterns' administration for the condition or
conditions in question.
9. Not have been found by a governmental agency or a court of law to have committed an
act of fiaud or abuse with respect to any cash or in- kind benefit program including aid to families
with dependent children, general assistance. food stamps. a state medicaid program or any state or
county sponsored medical assistance program.
10. Not be receiving federal medical benefits.
D. For the purposes of determining eligibilitj. the director of the administration shall
develop:
1 . A presumptive eligibility application process for demonstration project applicants to be
used by participating counties and the department of economic security Gross annual income
shall be calculated by multiply by four the applicant's income for the three month immediately
prior to the applicant for eligibility for the premium sharing demonstration pro- ject and:
2. A biannual eligibility review process for determining eligibility.
E. An enrollee shall receive health care services available to the medically needy as
prescribed bj section 1 1- 297. Arizona Revised Statutes. except that enrollees shall:
I . Paj $ 8.00 per physician visit.
2. Pay $ 25.00 for each emergency room visit except that the fee shall be waived if the person
is admitted to the hospital.
3. Pal $ 50 for each emergency room visit that is for a non- emergency use.
3. Pay $ 3.00 for each prescriptions that is filled with a generic drug and fifty percent of the
cost of each prescription that is filled with a brand name pharmaceuticals.
5. Pay $ 8.00 for the each lab and X- ray service.
6. Re eligible for behavioral health services as follows.
a. Pay $ 50.00 per behavioral health admission to an inpatient behavioral facilit?. Enrollees
are eligible for a maximum of ten days of inpatient behavioral health services annually.
b. Pay $ 1 0.00 for individual out patient mental health services.
c. Pay $ 5.00 for outpatient mental health group services.
7. Not be eligible to receive transplant services.
For the purposes of this subsection. " copayrnent" means the monetary amount specified in this
subsection which the enrollee pays the contracting provider at the time services are rendered.
F. Providers may withhold medical services to enrollees that do not pay copayments in full at
the time the service is rendered.
G. The director of the administration shall require as a condition of a contract with any
provider that a marketing plan be developed to reach persons eligible pursuant to this section.
H. For the purposes of the demonstration project. the administration shall establish the
total premium costs and shall establish the portion of the monthly premium that each enrollee
contribution shall pay based on the following:
1. The enrollee's gross income and household size. The premium shall not exceed four
percent of the enrollee's household gross income.
2. The total amount of hnds available in the premium sharing demonstration project hnd
established pursuant to 36- 2923, Arizona Revised Statute. The total amount of state monies that
may be spent in any fiscal year by the administration for the premium sharing demonstration
project shall not exceed the amount appropriated or authorized by section 36- 2923, Arizona
Revised Statutes
3. Initial premiums shall be based on preliminary rates established by William Mercer in the
December 20, 1996 report submitted to the premium sharing demonstration project committee.
I. A11 enrollees shall pay the required enrollee premium payment and full copayrnent charges
established by the administration.
J. If the federal waiver ( Prop. 203) is approved enrollees in the premium sharing
demonstration project who have incomes less than one hundred percent of the federal poverty
guidelines as published annually by the United Sates Department of Health and Human services
shall transfer to that program.
Section 2. Enrollment cap
The administration shall limit enrollment in the demonstration project so that annual premium
expenditures by the state for the program do not exceed the annual appropriation to the program
pursuant to 36- 2923, Arizona Revised Statutes. ' I'he administration shall determine the number of
demonstration project participants that can be enrolled within this parameter. The administration
shall limit the number of chronically ill participants to two hundred.
Section 3. Rules
The Arizona health care cost containment system administration shall develop rules in
accordance with the provisions of this act and is exempt fi- om the rule making requirements of
title 41. chapter 6, Arizona Revised Statutes. for the purpose of developing these rules. The
administration shall conduct public hearings. including at least two in counties with a population
of less than five hundred thousand persons according to the most recent United States decennial
census. before it adopts exempted rules. The administration shall publish adopted rules pursuant
to title 41. chapter 6. Arizona Revised Statutes.
Section 4. Reports
A. Beginning in 1997. the director of the Arizona health care cost containment system
administration shall report on or before December 15 of each year. to the premium sharing
demonstration project implementation committee on the implementation and development of the
premium sharing demonstration project. The administration shall submit a report to the governor.
the president of the senate and the speaker of the house of representatives. The director of the
Arizona health care cost containment system administration shall include in the report
recommendations regarding the demonstration project. The report shall include recommendations
on transitioning premium sharing demonstration project enrollees who have incomes less than one
hundred percent of the federal poverty guidelines as published annually by the United Sates
Department of Health and Human services, into the new program, if the federal waiver ( Prop.
203) is approved
B. Beginning in 1997, the legislative council shall submit a report on or before December
15 of each year. and make recommendations to the premium sharing demonstration project
implementation committee. The report shall contain the following information regarding the
demonstration project:
1 . An analysis of client satisfaction.
2. Program enrollment information.
3. The average annual income of the enrollee.
4. The annual medical service expenditure.
5. The total monies collected from enrollees.
6. Information necessary to analyze and evaluate the project's effectiveness or impact.
Section 5. Delayed Repeal
This act is repealed from and afier September 30. 2000.
Appendix A
Laws 1996, Chapter 368 ( HB 2508)
S e n a t e E n g r o s s e d H o u s e B i l l
S t a t e o f A r i z o n a
H o u s e o f R e p r e s e n t a t i v e s
F o r t y - s e c o n d L e g i s l a t u r e
S e c o n d R e g u l a r S e s s i o n
1 9 9 6
CHAPTER 368
FILED
Jane Dee Hull
Secretary of State
HOUSE BILL 2508
AN ACT
AMENDING T I T L E 3 6 , CHAPTER 2 9 , ARTICLE 1, ARIZONA REVISED STATUTES. BY ADDING
SECTION 3 6 - 2 9 0 7 . 0 8 : AMENDING SECTION 3 6 - 2 9 2 1 . ARIZONA REVISED STATUTES;
AMENDING SECTION 3 6 - 2 9 2 2 , ARIZONA REVISED STATUTES; AMENDING T I T L E 3 6 .
CHAPTER 2 9 . ARTICLE 1. ARIZONA REVISED STATUTES, BY A D D I N G S E C T I O N 3 6 - 2 9 2 3 ;
AMENDING LAWS 1 9 9 6 . F I F T H SPECIAL SESSION, CHAPTER 5. SECTION 7; PROVIDING
FOR CONDITIONAL DELAYED REPEAL; MAKING AN APPROPRIATION; RELATING TO THE
MEDICALLY NEEDY ACCOUNT OF THE TOBACCO TAX AND HEALTH CARE FUND.
Be i t e n a c t e d by t h e L e g i s l a t u r e o f t h e S t a t e o f A r i z o n a :
S e c t i o n 1. T i t l e 3 6 , c h a p t e r 2 9 , a r t i c l e 1. A r i z o n a R e v i s e d S t a t u t e s ,
i s a m e n d e d by a d d i n g s e c t i o n 3 6 - 2 9 0 7 . 0 8 . t o r e a d :
3 6 - 2 9 0 7 . 0 8 . B a s i c c h i 1 d r e n ' s m e d i c a l s e r v i c e s roara am;
d e f i n i t i o n
A. BEGINNING ON OCTOBER 1. 1 9 9 6 . THE BASIC CHILDREN'S MEDICAL SERVICES
PROGRAM I S ESTABLISHED TO PROVIDE GRANTS TO HOSPITALS THAT EXCLUSIVELY SERVE
THE MEDICAL NEEDS OF CHILDREN OR THAT OPERATE PROGRAMS DESIGNED PRIMARILY FOR
CHILDREN. THE DIRECTOR OF THE DEPARTMENT OF HEALTH SERVICES. PURSUANT TO AN
INTERGOVERNMENTAL AGREEMENT WITH THE DIRECTOR OF THE ARIZONA HEALTH CARE COST
CONTAINMENT SYSTEM AND SUBJECT TO THE A V A I L A B I L I T Y OF MONIES. SHALL IMPLEMENT
AND OPERATE T H I S PROGRAM ONLY TO THE EXTENT THAT FUNDING I S A V A I L A B L E AND HAS
BEEN S P E C I F I C A L L Y DEDICATED FOR THE PROGRAM.
B. TO RECEIVE A GRANT UNDER T H I S SECTION, A HOSPITAL S H A L L S U B M I T AN
A P P L I C A T I O N AS PRESCRIBED BY THE DIRECTOR OF THE DEPARTMENT OF HEALTH
SERVICES I N A REQUEST FOR PROPOSAL THAT I N D I C A T E S TO THE DIRECTOR'S
SATISFACTION THAT THE APPLICAKT AGREES TO:
1. USE GRANT PROGRAM MONIES TO ENHANCE THE A P P L I C A N T ' S PROVISION OF
A D D I T I O N A L MEDICAL SERVICES TO CHILDREN AND TO IMPROVE THE A P P L I C A N T ' S
H. B. 2 5 0 8
A B I L I T Y TO DELIVER I N P A T I E N T . OUTPATIENT AND SPECIALIZED C L I N I C A L SERVICES
TO INDIGENT. UNINSURED OR UNDERINSURED CHILDREN WHO ARE NOT E L I G I B L E TO
RECEIVE SERVICES UNDER T H I S ARTICLE.
2. ESTABLISH AND ENFORCE A S L I D I N G FEE SCALE FOR CHILDREN WHO ARE
PROVIDED SERVICES WITH GRANT MONIES.
3. ACCOUNT FOR MONIES COLLECTED PURSUANT TO PARAGRAPH 2 OF T H I S
SUBSECTION SEPARATELY FROM ALL OTHER INCOME I T RECEIVES AND TO REPORT T H I S
INCOME ON A QUARTERLY BASIS TO THE ADMINISTRATION.
4. USE THE GRANT TO SUPPLEMENT MONIES ALREADY AVAILABLE TO THE
APPLICANT.
5. MATCH THE GRANT AS PRESCRIBED BY THE DIRECTOR BY RULE WITH PRIVATE
MONIES THE APPLICANT HAS PLEDGED FROM PRIVATE SOURCES. THE DIRECTOR SHALL
WAIVE T H I S REQUIREMENT I F THE APPLICANT I S SEEKING THE GRANT TO QUALIFY FOR
A PRIVATE OR PUBLIC GRANT FOR THE DELIVERY OF INPATIENT, OUTPATIENT OR
SPECIALIZED C L I N I C A L CARE OF INDIGENT. UNINSURED OR UNDERINSURED CHILDREN WHO
ARE NOT E L I G I B L E TO RECEIVE SERVICES UNDER T H I S ARTICLE.
6. PROVIDE A MECHANISM . TO ENSURE THAT GRANT PROGRAM MONIES ARE NOT
USED FOR CHILDREN WHO ARE E L I G I B L E FOR SERVICES UNDER T H I S ARTICLE.
7. NOT USE GRANT MONIES TO FUND THE PROVISION OF EMERGENCY ROOM
SERVICES.
C. BY CONTRACT. THE DIRECTOR OF THE DEPARTMENT OF HEALTH SERVICES
SHALL REQUIRE A GRANTEE TO:
1. ANNUALLY ACCOUNT FOR ALL EXPENDITURES I T MAKES WITH GRANT PROGRAM
MONIES DURING THE PREVIOUS YEAR.
2. AGREE TO COOPERATE WITH ANY AUDITS OR REVIEWS CONDUCTED BY T H I S
STATE.
3. AGREE TO THE REQUIREMENTS OF THIS SECTION AND OTHER CONDITIONS THE
DIRECTOR DETERMINES TO BE NECESSARY FOR THE EFFECTIVE USE OF GRANT PROGRAM
MONIES.
D. THE DIRECTOR OF THE DEPARTMENT OF HEALTH SERVICES MAY L I M I T EITHER
OR BOTH THE GRANT AMOUNT PER CONTRACT OR THE NUMBER OF CONTRACTS AWARDED.
I N AWARDING CONTRACTS TO Q U A L I F I E D APPLICANTS THE DIRECTOR SHALL CONSIDER:
1. THE AMOUNT OF MONIES AVAILABLE FOR THE GRANT PROGRAM.
2. THE NEED FOR GRANT MONIES I N THE AREA SERVED BY THE APPLICANT AS
STATED BY THE APPLICANT I N THE RESPONSE TO THE REQUEST FOR PROPOSALS AND AS
RESEARCHED BY THE ADMINISTRATION.
3. THE NUMBER OF CHILDREN ESTIMATED TO BE SERVED BY THE APPLICANT WITH
GRANT PROGRAM MONI ES.
4 . THE SERVICES THAT WILL BE PROVIDED OR MADE AVAILABLE WITH GRANT
PROGRAM MONIES.
5. THE PERCENTAGES OF GRANT MONIES THAT THE APPLICANT INDICATES WILL
BE RESERVED FOR ADMINISTRATIVE EXPENDITURES. DIRECT SERVICE EXPENDITURES AND
MEDICAL CARE PERSONNEL COSTS.
, H. B. 2 5 0 8
6. THE F I N A N C I A L AND PROGRAMMATIC A B I L I T Y OF THE APPLICANT TO MEET THE
CONTRACT'S REQUIREMENTS.
E. I F THE DEPARTMENT OF HEALTH SERVICES DETERMINES THAT A HOSPITAL HAS
USED GRANT MONIES I N V I O L A T I O N OF T H I S SECTION I T SHALL P R O H I B I T THAT
HOSPITAL FROM R E C E I V I N G A D D I T I O N A L GRANT PROGRAM MONIES U N T I L THE H O S P I T A L
REIMBURSES THE DEPARTMENT. THE DEPARTMENT SHALL IMPOSE A N I N T E R E S T PENALTY
AS PRESCRIBED BY THE DIRECTOR OF THE DEPARTMENT OF H E A L T H S E R V I C E S BY RULE.
THE DIRECTOR SHALL TRANSMIT PENALTIES COLLECTED UNDER T H I S SECTION TO THE
STATE TREASURER FOR DEPOSIT I N THE MEDICALLY NEEDY ACCOUNT OF THE TOBACCO TAX
AND HEALTH CARE FUND.
F. THE DIRECTOR OF THE DEPARTMENT OF HEALTH SERVICES MAY EXPEND MONIES
FROM THE MEDICALLY NEEDY ACCOUNT OF THE TOBACCO TAX AND HEALTH CARE FUND
TRANSFERRED PURSUANT TO SECTION 3 6 - 2 9 2 1 . SUBSECTION A . PARAGRAPH 7 FOR THE
PURPOSE OF FUNDING EVALUATIONS OF THE GRANT PROGRAM ESTABLISHED BY T H I S
SECTION. THE DIRECTOR SHALL ENSURE THAT ANY EVALUATION I S STRUCTURED TO MEET
AT LEAST THE BASE REQUIREMENTS PRESCRIBED I N SECTION 3 6 - 2 9 0 7 . 0 7 .
G. THE DIRECTOR OF THE DEPARTMENT OF HEALTH SERVICES MAY EXPEND MONIES
FROM THE MEDICALLY NEEDY ACCOUNT OF THE TOBACCO TAX AND HEALTH CARE FUND
TRANSFERRED PURSUANT TO SECTION 3 6 - 2 9 2 1 . SUBSECTION A , PARAGRAPH 7 FOR
A D M I N I S T R A T I V E COSTS ASSOCIATED WITH THE ESTABLISHMENT OR THE OPERATION OF
THE GRANT PROGRAM. THE AMOUNT WITHDRAWN ANNUALLY FOR GRANT PROGRAM
A D M I N I S T R A T I V E COSTS SHALL NOT EXCEED TWO PER CENT OF THE SUM OF ANY
TRANSFERS OF MONIES MADE PURSUANT TO SECTION 3 6 - 2 9 2 1 AND ANY APPROPRIATION
OF MONIES FOR THE S P E C I F I E D PURPOSE OF SUPPORTING THE NONENTITLEMENT B A S I C
C H I L D R E N ' S M E D I C A L SERVICES PROGRAM ESTABLISHED I N T H I S SECTION.
H. THE DEPARTMENT OF HEALTH SERVICES SHALL D I R E C T L Y A D M I N I S T E R THE
GRANT PROGRAH AND ALL CONTRACTS ESTABLISHED PURSUANT TO T H I S SECTION. THE
DIRECTOR OF THE DEPARTMENT OF HEALTH SERVICES SHALL P U B L I S H RULES PURSUANT
TO T I T L E 4 1 . CHAPTER 6 FOR THE GRANT PROGRAM BEFORE THE ISSUANCE OF THE
I N I T I A L GRANT PROGRAM REQUEST FOR PROPOSALS. THE DIRECTOR O F THE DEPARTMENT
OF HEALTH SERVICES AND THE CONTRACTOR SHALL SIGN A CONTRACT BEFORE THE
TRANSMISSION OF ANY TOBACCO TAX AN0 HEALTH CARE FUND MONIES TO THE
CONTRACTOR.
I. I N ADMINISTERING THE B A S I C C H I L D R E N ' S MEDICAL SERVICES PROGRAM AND
AWARDING CONTRACTS ESTABLISHED PURSUANT TO T H I S SECTION. THE DIRECTOR OF THE
DEPARTMENT OF HEALTH SERVICES SHALL SEEK TO E F F I C I E N T L Y AND. EFFECTIVELY
COORDINATE THE DELIVERY OF SERVICES PROVIDED THROUGH THE PROGRAM WITH
SERVICES PROVIDED THROUGH OTHER PROGRAMS INCLUDING THOSE ESTABLISHED PURSUANT
TO CHAPTER 2. ARTICLE 3 Of TH! S T I T L E AND SECTIONS 3 6 - 2 9 0 7 . 0 5 AND 3 6 - 2 9 0 7 . 0 6 .
THE DIRECTOR SHALL SEEK TO ENSURE THAT T H I S COORDINATION RESULTS I N PROVIDING
FOR E I T H E R OR BOTH THE COVERAGE OF A D D I T I O N A L CHILDREN OR THE PROVISION OF
A D D I T I O N A L MEDICALLY NECESSARY SERVICES TO CHILDREN INSTEAD O F SUPPLANTING
E X I S T I N G SERVICE OPPORTUNITIES GR D U P L I C A T I N G E X I S T I N G PROGRAMS WITH NO
ATTENDANT INCREASE I N COVERAGE.
H. B. 2508
J . FOR THE PURPOSES OF THIS SECTION. " GRANT PROGRAM" REFERS TO THE
BASIC CHILDREN'S MEDICAL SERVICES PROGRAM.
Sec. 2. Section 36- 2921. Arizona Revised S t a t u t e s . i s amended t o read:
36- 2921. Tobacco t a x a l l o c a t i o n
A. Subject t o t h e a v a i l a b i l i t y o f monies i n t h e m e d i c a l l y needy
account e s t a b l i s h e d pursuant t o s e c t i o n 42- 1241, subsection C, paragraph 3
t h e a d m i n i s t r a t i o n s h a l l use t h e monies i n t h e account i n t h e f o l l o w i n g
o r d e r :
1. The a d m i n i s t r a t i o n s h a l l withdraw t h e amount necessary t o pay the
s t a t e share o f costs f o r p r o v i d i n g h e a l t h care services t o any person who i s
e l i g i b l e pursuant t o s e c t i o n 36- 2901, paragraph 4, s u b d i v i s i o n s ( a ) . ( c ) and
( h ) . - and who becomes e l i g i b l e f o r h e a r t . LUNG. HEART- LUNG. l i v e r or
auto1 ogous and a1 1 ogenei c bone marrow t r a n s p l ants pursuant t o section
36- 2907. subsection A, paragraph 11, SUBDIVISION ( d l as determined by the
a d m i n i s t r a t o r AND TO ANY PERSON WHO IS ELIGIBLE PURSUANT TO SECTION 36- 2901,
PARAGRAPH 4, SUBDIVISION ( b) AND WHO BECOME ELIGIBLE FOR LUNG OR HEART- LUNG
TRANSPLANTS PURSUANT TO SECTION 36- 2907, SUBSECTION A, PARAGRAPH 11,
SUBDIVISION ( b ) . AS DETERMINED BY THE ADMINISTRATOR.
2. Beginning on August 1, 1995 and on t h e f i r s t day of each month
t h e r e a f t e r . t h e sum of one m i l l i o n two hundred f i f t y thousand d o l l a r s s h a l l
be t r a n s f e r r e d from the m e d i c a l l y needy account t o t h e
~. . MED ICAL SERVICES s t a b i l i z a t i o n fund f o r uses as
p r e s c r i b e d i n s e c t i o n 36- 2922.
3. From and a f t e r August 1, 1995 and each year t h e r e a f t e r , the
a d m i n i s t r a t i o n s h a l l t r a n s f e r not more than f i f t e e n m i l l i o n d o l l a r s t o the
department o f h e a l t h services t o be a l l o c a t e d as f o l l o w s i f the department
awards a c o n t r a c t :
. .
,( a ) Up, :: C;,.. 3- tti. rtc:- 1c:; . t".- v-, ONE- THIRD o f the t o t a l amount
t r a n s f e r r e d . f o r t h e mental h e a l t h g r a n t program e s t a b l i s h e d pursuant t o
s e c t i o n 36- 3414.
( b ) 1 - : ; = 1 : c. le,, c ' 3 . - ONE- THIRD o f the t o t a l amount
t r a n s f e r r e d , f o r primary c a r e s e r v i c e s e s t a b l i s h e d pursuant t o section
36- 2907.05.
( C ) ? LL - ONE- THIRD o f the t o t a l amount
t r a n s f e r r e d . f o r grants t o the community h e a l t h centers e s t a b l i s h e d
pursuant t o s e c t i o n 36- 2907.06.
4 . From and a f t e r August 1. 1995. t h e a d m i n i s t r a t i o n s h a l l t r a n s f e r
up t o f i v e hundred thousand d o l l a r s annually f o r f i s c a l years 1995- 1996 and
1996- 1997 f o r p i l o t programs p r o v i d i n g d e t o x i f i c a t i o n services i n counties
having a p o p u l a t i o n of f i v e hundred thousand persons o r less according t o the
most recent United States decennial census.
H. B. 2 5 0 8
5. The a d m i n i s t r a t i o n s h a l l t r a n s f e r up t o two hundred f i f t y thousand
d o l l a r s annually f o r f i s c a l years 1 9 9 5 - 1 9 9 6 . 1 9 9 6 - 1 9 9 7 and 1 9 9 7 - 1 9 9 8 f o r
telemedicine p i l o t programs designed t o f a c i 1 i t a t e t h e p r o v i s i o n of medical
services t o persons 1 i v i n g i n medically underserved areas as &+ i+ ed PROVIDED
i n s e c t i o n 3 6 - 2 3 5 2 .
6 . THE ADMINISTRATION SHALL TRANSFER UP TO ONE HUNDRED F I F T Y THOUSAND
DOLLARS ANNUALLY BEGINNING I N FISCAL YEAR 1 9 9 6 - 1 9 9 7 FOR CONTRACTS BY THE
DEPARTMENT OF HEALTH SERVICES WITH NONPROFIT ORGANIZATIONS THAT PRIMARILY
A S S I S T I N THE MANAGEMENT OF END STAGE RENAL DISEASE AND RELATED PROBLEMS.
CONTRACTS SHALL NOT INCLUDE PAYMENTS FOR TRANSPORTATION OF PATIENTS FOR
D I A L Y S I S .
7. CONTINGENT ON THE EXISTENCE OF A PREMIUM SHARING DEMONSTRATION
PROJECT FUND. BEGINNING OCTOBER 1, 1 9 9 6 AND U N T I L SEPTEMBER 3 0 . 1 9 9 9 , THE
ADMINISTRATION SHALL WITHDRAW THE SUM OF TWENTY M I L L I O N DOLLARS I N EACH GF
FISCAL YEARS 1 9 9 6 - 1 9 9 7 . 1 9 9 7 - 1 9 9 8 AND 1 9 9 8 - 1 9 9 9 FOR DEPOSIT I N THE PREMIUM
SHARING DEMONSTRATION PROJECT FUND ESTABLISHED BY SECTION 36- 2923 TO PROVIDE
HEALTH CARE SERVICES TO ANY PERSON WHO I S E L I G I B L E FOR AN ARIZONA HEALTH CARE
COST CONTAINMENT SYSTEM PREMIUM SHARING DEMONSTRATION PROGRAM ENACTED BY THE
LEGISLATURE. THE ARIZONA HEALTH CARE COST CONTAINMENT SYSTEM PREMIUM SHARING
DEMONSTRATION PROGRAM ENACTED BY THE LEGISLATURE SHALL NOT BE AN ENTITLEMENT
PROGRAM.
8. SUBJECT TO THE A V A I L A B I L I T Y OF MONIES. THE ARIZONA HEALTH CARE COST
CONTAINMENT SYSTEM ADMINISTRATION SHALL TRANSFER TO THE DEPARTMENT OF HEALTH
SERVICES UP TO F I V E M I L L I O N DOLLARS ANNUALLY BEGINNING I N FISCAL YEAR
1 9 9 6 - 1 9 9 7 FOR PROVIDING NONENTITLEMENT FUNDING FOR A BASIC CHILDREN'S MEDICAL
SERVICES PROGRAM ESTABLISHED BY SECTION 3 6 - 2 9 0 7 . 0 8 . THE ADMINISTRATION MAY
ALSO WITHDRAW AND TRANSFER TO THE DEPARTMENT AMOUNTS FOR PROGRAM EVALUATION
AND FOR ADMINISTRATIVE COSTS AS PRESCRIBED I N SECTION 3 6 - 2 9 0 7 . 0 8 .
B. The department o f h e a l t h services s h a l l e s t a b l i s h an accounting
procedure t o ensure t h a t a l l funds t r a n s f e r r e d pursuant t o t h i s s e c t i o n are
maintained s e p a r a t e l y from any other funds.
C. The a d m i n i s t r a t i o n s h a l l annually withdraw monies from t h e
medically needy account i n the amount necessary t o reimburse t h e department
of h e a l t h services f o r a d m i n i s t r a t i v e costs t o implement each program
e s t a b l i s h e d pursuant t o subsection A of t h i s s e c t i o n n o t t o exceed two per
cent of the amount t r a n s f e r r e d f o r each program.
D. The a d m i n i s t r a t i o n s h a l l annually withdraw monies from the
medically needy account i n the amount necessary t o reimburse t h e department
of health services f o r t h e e v a l u a t i o n s as p r e s c r i b e d by s e c t i o n 3 6 - 2 9 0 7 . 0 7 .
E. The a d r n i n l s t r a t l o n s h a l l annually r e p o r t , no l a t e r than November
1 of each year. t o the j o i n t l e g i s l a t i v e o v e r s i g h t committee on the tobacco
tax and health care fund the annual revenues deposited i n the m e d i c a l l y needy
account and the estimated expenditures needed i n t h e subsequent year t o
p r o v i d e funding f o r s e r v i c e s p r o v i d e d i n subsection A, paragraph 1 o f t h i s
H. B. 2508
section. The a d m i n i s t r a t i o n s h a l l immediately r e p o r t t o t h e cochairs o f the
o v e r s i g h t committee i f a t any time t h e a d m i n i s t r a t i o n estimates t h a t t h e
amount a v a i l a b l e i n t h e m e d i c a l l y needy account w i l l not be s u f f i c i e n t t o
fund the maximum a l l o c a t i o n s e s t a b l i s h e d i n t h i s s e c t i o n .
Sec. 3. Section 36- 2922, Arizona Revised Statutes, i s amended t o read:
36- 2922. Medical services s t a b i 1 i z a t i o n fund: d e f i n i t i o n
A. S u b j e c t t o t h e a v a i l a b i l i t y o f monies as p r e s c r i b e d i n s e c t i o n
36- 2921. t h e
. . MEDICAL SERVICES
s t a b i l i z a t i o n fund i s e s t a b l i s h e d i n t h e s t a t e treasury. The a d m i n i s t r a t i o n
s h d l l a d m i n i s t e r the fund as d i r e c t e d by t h e j o i n t l e g i s l a t i v e budget
committee pursuant t o subsection 4& E o f t h i s s e c t i o n .
B. The fund s h a l l be used o n l y t o o f f s e t . . increases i n
the cost o f p r o v i d i n g l e v e l s o f services e s t a b l i s h e d pursuant t o t h i s a r t i c l e
provided t o persons who are determined t o be m e d i c a l l y i n d i g e n t pursuant t o
s e c t i o n 11- 297. m e d i c a l l y needy pursuant t o s e c t i o n 36- 2905 o r low income
c h i l d r e n pursuant t o s e c t i o n 36- 2905.03 as a u t h o r i z e d pursuant t o t h i s
s e c t i o n .
C. NOTWITHSTANDING SECTION 42- 1241 OR 42- 1242, THE FUND MAY ALSO BE
USED TO OFFSET INCREASES IN THE COST OF PROVIDING LEVELS OF SERVICES
ESTABLISHED PURSUANT TO THIS ARTICLE TO PERSONS ELIGIBLE FOR THOSE SERVICES
PURSUANT TO SECTION 36- 2901, PARAGRAPH 4. SUBDIVISION ( b ) I F THE INCREASE
RESULTS FROM A DECREASE IN FEDERAL FUNDING FOR LEVELS OF SERVICE INCLUDING
A DECREASE I N THE FEDERAL MATCH RATE FOR LEVELS OF SERVICE PROVIDED TO
PERSONS ELIGIBLE PURSUANT TO SECTION 36- 2901, PARAGRAPH 4. SUBDIVISION ( b ) .
& D. I f , d u r i n g a f i s c a l year, t h e a d m i n i s t r a t i o n determines t h a t
the amount t h e l e g i s l a t u r e a p p r o p r i a t e d f o r t h a t f i s c a l year f o r services . . provided t o persons who are determined t o be wd- i- mlf;. wet, metl+ d+
----'.. ELIGIBLE FOR SERVICES PURSUANT TO SECTION
36- 2901, PARAGRAPH 4, SUBDIVISION ( a ) . ( b ) . ( c ) OR ( h ) i s i n s u f f i c i e n t t o pay
f o r u n a n t i c i p a t e d increases i n t h e cost of p r o v i d i n g t h o s e s e r v i c e s , the
a d m i n i s t r a t i o n s h a l l provide w r i t t e n n o t i c e of the d e f i c i e n c y t o the
chairperson of the j o i n t l e g i s l a t i v e budget committee and the d i r e c t o r o f the
governor's o f f i c e of s t r a t e g i c planning and budgeting w i t h evidence
supporting the d e t e r m i n a t i o n o f d e f i c i e n c y .
E. On r e c e i v i n g n o t i c e under subsection & D o f t h i s section, the
chairperson o f the j o i n t l e g i s l a t i v e budget committee s h a l l c a l l a p u b l i c
committee meeting t o review the evidence of the d e f i c i e n c y presented by the
a d m i n i s t r a t i o n . A f t e r reviewing the evidence, t h e committee may recommend
t o the a d m i n i s t r a t i o n t o withdraw an amount from t h e fund t h a t i s equal t o
. . the d e f i c i e n c y t o pay the Y increases i n the c o s t o f p r o v i d i n g
l e v e l s o f s e r v i c e -..--..--':: G! , ; z w.
& F. For the purposes of t h i s section " l e v e l s o f s e r v i c e " means the
p r o v i d e r payment method01 ogy , e l i g i b i 1 i t y c r i t e r i a and covered services
e s t a b l i s h e d pursuant t o t h i s a r t i c l e AND i n e f f e c t on J u l y 1, 1993.
H. B. 2 5 0 8
S e c . 4 . T i t l e 3 6 . c h a p t e r 2 9 . a r t i c l e 1. A r i z o n a R e v i s e d S t a t u t e s . i s
a m e n d e d by a d d i n g s e c t i o n 3 6 - 2 9 2 3 , t o r e a d :
3 6 - 2 9 2 3 . P r e m i um s h a r i n q d e m o n s t r a t i o n D r o i e c t f u n d : D u r D o s e ;
e x ~ e n d i t u r e s : l a ~ s i n s : i n v e s t m e n t : d e f i n i t i o n
A. A PREMIUM SHARING DEMONSTRATION PROJECT FUND I S ESTABLISHED FOR
COSTS ASSOCIATED WITH AN ARIZONA HEALTH CARE COST CONTAINMENT SYSTEM PREMIUM
SHARING DEMONSTRATION PROJECT THAT I S TO PROVIDE UNINSURED PERSONS ACCESS TO
M E D I C A L S E R V I C E S PROVIDED BY SYSTEM PROVIDERS. THE FUND CONSISTS O F MONIES
DEPOSITED FROM THE MEDICALLY NEEDY ACCOUNT OF THE TOBACCO TAX AND HEALTH CARE
FUND PURSUANT TO SECTION 3 6 - 2 9 2 1 , SUBSECTION A. PARAGRAPH 6 AND PREMIUMS
COLLECTED FROM DEMONSTRATION PROJECT P A R T I C I P A N T S . THE ADMINISTRATION SHALL
A D M I N I S T E R THE FUND AS A CONTINUING APPROPRIATION.
0. BEGINNING ON OCTOBER 1, 1 9 9 7 , I F A PREMIUM SHARING DEMONSTRATION
PROJECT I S ESTABLISHED, THE A D M I N I S T R A T I O N SHALL SPEND MONIES I N THE FUND
THROUGH THE F I R S T QUARTER OF F I S C A L YEAR 2000- 2001 TO COVER DEMONSTRATION
PROJECT EXPENDITURES. THE A D M I N I S T R A T I O N MAY CONTINUE TO MAKE EXPENDITURES
FROM THE FUND. SUBJECT TO THE A V A I L A B I L I T Y O F MONIES I N THE FUND. FOR
COVERING PROGRAM COSTS INCURRED BUT NOT PROCESSED BY THE A D M I N I S T R A T I O N
DURING THE F I S C A L YEARS I N WHICH THE PROGRAM O F F I C I A L L Y OPERATED.
C. THE DIRECTOR MAY WITHDRAW NOT MORE THAN S E V E N T Y - F I V E THOUSAND
DOLLARS FROM THE FUND FOR THE F I F T E E N MONTH PERIOD BEGINNING JULY 1, 1 9 9 6 AND
ENDING SEPTEMBER 30, 1 9 9 7 TO COVER ADMINISTRATIVE EXPENDITURES RELATED TO THE
DEVELOPMENT OF A PREMIUM SHARING DEMONSTRATION PROJECT PROPOSAL OR ANY
PREMIUM SHARING DEMONSTRATION PROJECT ANALYSIS REQUESTED BY A COMMITTEE OF
THE LEGISLATURE.
D. MONIES I N THE FUND ARE EXEMPT FROM THE PROVISIONS O F SECTION 3 5 - 1 9 0
RELATING TO LAPSING OF APPROPRIATIONS. EXCEPT THAT A L L UNEXPENDED AND
UNENCUMBERED MONIES REMAINING ON OCTOBER 1. 2 0 0 1 REVERT TO THE MEDICALLY
NEEDY ACCOUNT OF THE TOBACCO TAX AND HEALTH CARE FUND.
E. THE STATE TREASURER SHALL INVEST THE MONIES I N THE FUND AND
INVESTMENT INCOME SHALL BE CREDITED TO THE FUND.
i . FOR PURPOSES OF T t i ! S SECTION. UNLESS OTHERWISE NOTED. " FUND" MEANS
THE PREMIUM SHARING DEMONSTRATION PROJECT FUND.
S e c . 5 . Laws 1 9 9 6 . f i F t h s p e c i a l s e s s l o n . c h a p t e r 5 . s e c t i o n 7 1 s
a m e n o e d t o r e a d :
S ~ C .7 . AHCCCS w l t h d ~ a w a 1 s : D u r D o s e s
N o t w i t h s t a n d i n g a n y o t h e r provision o f l a w , f o r s t a t e f i s c a l y e a r
1 9 9 6 - 1 9 9 7 . t h e A r i z o n a h e a l t h c a r e c o s t c o n t a l n m e n t s y s t e m a d r n l n ~ s t r a t i o n
s h a l l w l t h d r a w . a s n e c e s s a r y . t h e sum o f S 1 6 . 5 4 4 . 0 0 0 f r o m t h e m e d i c a l l y n e e d y
a c c o u n t o f t h e t o b a c c o t a x a n d h e a l t h c a r e f u n d e s t a b l i s h e d p u r s u a n t t o
s e c c i o n 4 2 - 1 2 4 1 . s u b s e c t i o n C . p a r a g r a p h 3. A r i z o n a R e v i s e d S t a t u t e s . s u b j e c t
t o t h e a v a l l a b i l ~ t yo f m o n i e s I n t h e a c c o u n t for the f o l l o w i n g p u r p o s e s a n d
t h e w i t h d r a w a l s s h a l l be made b e f o r e t h e w i t h d r a w a l s f o r t h o s e p u r p o s e s s e t
f o r t h i n section 3 6 - 2 9 2 1 . A r l z o n a R e v l s e d S t a t u t e s :
H . B . 2508
1. $ 10,000.000 to discontinue the annual ten million d o l l a r discount
on private hospital reimbursement required by Laws 1993, second special
session, chapter 6, section 39 as amended by Laws 1995, f i r s t special
session. chapter 5, section 10.
2. $ 4.522.800 to continue the scheduled phase- out of the quick payment
discount required by SECTIONS 8- 512, 36- 2903.01 AND 36- 2904, ARIZONA REVISED
STATUTES. LAWS 1992, CHAPTER 302, SECTION 14. AS AMENDED BY Laws 1993. second
special session, chapter 6. section 27 AND Laws 1995. f i r s t
special session, chapter 5. section 8- 6. AND LAWS 1993. SECOND SPECIAL
SESSION, CHAPTER 6. SECTION 29. AS AMENDED BY LAWS 1995. FIRST SPECIAL
SESSION, CHAPTER 5. SECTION 8.
3. $ 2.021.200 to replace federal funds reduced due to the lower
federal matching assistance percentage for federal f i s c a l year 1996- 1997 as
reported by the United States department of health and human services.
Sec. 6. Arizona health care cost containment svstem ~ remium
sharinu demonstrati on ~ r o . i e c t i m ~ elm entation
committee: recommendations
A. The Arizona health care cost containment system premium sharing
demonstration project implementation committee i s established to make
recommendati ons to the governor and the 1 egi s l ature regarding the
implementation of a premium sharing demonstration program to begin October
1. 1997. The committee shall use as the primary framework in developing
program recommendations the contents of House Bill 2508 and Senate Bill 1219
introduced during the second regular session of the forty- second l e g i s l a t u r e .
The commi t t e e shall recommend a program designed to allow e l i g i b l e persons
access to medical services provided by system providers through a cost
sharing arrangement w i t h the Arizona health care cost containment system
administration.
B . The president of the senate and the speaker of the house of
representatives shall each appoint three members of t h e l e g i s l a t u r e to serve
on the implementation committee. with no more t h a n two appointees from each
house representing the same political party. The president of the senate and
the speaker of the house of representatives shall each s e l e c t one of t h e i r
three appointees to be cochalrmen of the committee. The committee shall
provide a report of t h e l r recommendations to the governor, the president of
the senate. the speaker of the house of representatives. the secretary of
s t a t e , the dlrector of the department of l i brary. archives and public records
and the director of the Arizona l e g i s l a t i v e council by November 15, 1996.
C . When recommendlng eligibility c r i t e r i a for project p a r t ~ c i p a n t s .
the committee shall recommend the household income threshold for project
p a r t i c l p a t l o n t h a t s h a l l not exceed three hundred per cent of the federal
poverty guide1 ines published by the United States department of health and
human services. The committee shall also develop recommendations regarding
resource and asset thresholds for project e l i g i b i l i t y . E l i g i b i l i t y c r i t e r i a
H. B. 2508
recommendations shall also include provisions that require an applicant for
project services to be a l l of the following:
1. A United States citizen or a legal alien.
2 . A resident of t h i s s t a t e .
3. Uninsured for a period of a t l e a s t six months before application
for project services.
4. Meet a minimum resource t e s t established for the project.
D. The commi t t e e shall d i r e c t the Arizona health care cost containment
system administration to conduct a c t u a r i a l s t u d i e s t h a t provide estimates
relating to presentation rates a n d potential premium sharing costs based on
parameters recommended in this section and any other parameters the committee
e s t a b l i s h e s . The committee shall evaluate the f e a s i b i l i t y of devising
separate premium schedules based on d i f f e r e n t household s i z e s . A t the
direction of the committee. the Arizona health care cost containment system
administration shall provide d e t a i l s on the methodology for determining the
premium share cost for participants and the j u s t i f i c a t i o n for the methodology
used.
E . The committee shall evaluate the information obtained pursuant t o
subsections C and D of this section and shall recommend d e t a i l s on the
locations for the premium sharing demonstration project and the f e a s i b i l i t y
of limiting the number of project participants.
F . The committee shall recommend a service package t h a t shall be
de1 ivered through the Arizona health care cost containment system and may
include health care and hospitalization services similar to those provided
pursuant to section 36- 2907. Ari zona Revi sed S t a t u t e s . The commi t t e e may
consider a l t e r n a t i v e service packages for project p a r t i c i p a n t s .
G . The committee shall recommend the e n t i t y t h a t should be responsible
f o r c o l l e c t i n g the premiums a n d the method for collecting the premiums.
H . The committee shall ensure t h a t i t s recommendations for the
demonstration project clearly ~ n d ~ c a tt hea t :
1. The prov~ sions of the project to be implemented neither entail an
applicant's entitlement to project services nor obligate the Arizona health
care cos: containment systen i n a n y manner to provide coverage to persons
beyond the number that car De served by the resources specifically dedicated
by the legislature for the D - o j e c i .
2 . The dlrector of the Arizona health care cost containment system
administration sha'l use the monies available i n the premium sharing
demonstration project func. established by section 36- 2923. Arizona Revised
Statutes. i n a manner that ersures that the demonstration project can be in
o? eration over the perloc c' tlme beginning October 1. 1997 a n d ending
September 30. 2000.
3. The director of the Arlzona health care cost containment system
adminlstratlon shall administer the project and use any project control
mechanism available such as a n enrollment cap in a manner that ensures t h a t
H. B. 2508
1 the project does not r e s u l t in expenditures t h a t would exceed the monies
2 available in the premium sharing demonstration project fund, established
3 pursuant to section 36- 2923. Arizona Revised Statutes. as added by t h i s act.
4 I . For purposes of t h i s section. " project" means the Arizona health
5 care cost containment system premium sharing demonstration project t h a t i s
6 - to be designed and developed according to the provisions of t h i s section.
7 Sec. 7. Rules: exern~ tion
8 The department of health services i s exempt from the r u l e making
9 requirements of t i t l e 41, chapter 6, Arizona Revised S t a t u t e s , to implement
10 the requi rements of section 36- 2907 - 08. Arizona Revised S t a t u t e s . as added
11 by t h i s a c t . The department shall conduct public hearings, including a t
12 l e a s t two in counties with a population of l e s s than f i v e hundred thousand
13 persons according to the most recent United States decennial census, before
14 i t adopts exempted rules. The department shall publish adopted rules
15 pursuant to t i t l e 41, chapter 6. Arizona Revised S t a t u t e s .
16 Sec. 8. Delayed r e ~ e a l
17 Section 6 of t h i s act i s repealed from and a f t e r December 31, 1996.
18 Sec. 9. Conditional del aved r e ~ e a l
19 A. Section 36- 2923. Arizona Revised S t a t u t e s . as added by t h i s a c t ,
2 0 i s repealed from and a f t e r December 31. 1997 i f the premium sharing
2 1 demonstration project i s not implemented by t h a t date.
2 2 0 . If section 36- 2923. Arizona Revised Statutes. i s repealed pursuant
2 3 t o t h i s section, monies remaining in the premium sharing demonstration
2 4 project fund revert to the medically needy account of the tobacco tax and
2 5 health care f u n d established under section 42- 1241, Arizona Revised Statutes.
2 6 Sec. 10. Tobacco t a x a n d health care fund: t r a n s f e r of monies;
2 7 ~ D D ~ O aDt 1~ onI
2 8 Effective on October 1. 1996. the sum of $ 30.000.000 i s transferred
2 9 from the medically needy account of the tobacco tax a n d health care fund
3 0 established by section 4 2 - 1241. Arizona Revised S t a t u t e s . to the medical
3 1 services stabilization f u n d established by section 36- 2922. Arizona Revised
3 2 S t a t u t e s . a n d is appropriated to that f u n d . The s t a t e treasurer shall make
3 t h i s one- time t r a n s f e r .
- 10 -
: ForCornxnitteeonHealth For Caucus and Floor Action -
- For Committee on As Passed the House -
A R I Z O N A H O U S E OF R E P R E S E N T A T I V E S
SECOND REGULAR SESSION - 1996 I
BILL SUMMARY FOR HB 2508
premium sharing
Introduced by: Weiers, Knaperek, W a n
HI3 2508 amends statutes relating to the Arizona Health Care Cost Containment System ( AHCCCS)
state- bnded medically needylmedically indigent ( MN/ MI) program as follows:
M 9 ;
• Establishes a three year, medically needy premium sharing demonstration project ( MN)
beginning October 1, 1997 to serve persons who are " medically needy residents" by replacing
the current state- fbnded MNM program.
• Establishes criteria to define those MN members who shall pay a premium and those who
shall not as follows:
- A " medically needy resident," must have an annual individual income that does not
exceed $ 3200, or is between $ 3333 and $ 4266 if the person is living with a dependent
member of the hndy household or if married and living with a spouse. These persons
are not required to pay either a premium or copayrnent.
- A person who's annual income exceeds $ 3200, but is less than 300% of the Federal
Poverty Level ( FPL) may also apply for the MN program, but will be required to pay
a percentage of the premium as well as a copayrnent.
Maintains the current resource requirements for the new MN program, which require an
applicant's household net worth of resources not to exceed $ 50,000; for an individual
applicant who is married, any separate property of the applicant's spouse that does not
exceed $ 75,000 shall not be included in determining the net worth of the applicant's
resources.
• Removes the " spend down" allowance in determining eligibility. Currently, ari applicant may
apply his or her medical bills toward the income eligibility criteria. Under HB 2508, an
applicant's medical expenses will not be used to reduce the value of the applicant's annual
income.
• States that an applicant's annual income is calculated by multiplying by 4 the applicant's
estimated income immediately following the date of application for eligibility for the system.
Currently, in calculating ehgibility for county hospitalization and medical care of the indigent
sick, the annual income of an individual shall be determined by multiplying by 4 the income
for the three months immediately prior to application. The new method estimates an
applicant's true income prospectively for a more accurate determination.
Provides that a person who is eligible for services for the MNM program before the '
effective date of this act may continue to receive services rifler the effective date of this act
for the remaining period allowed at the time they were determined to be eligible. Once the
six- month cycle is complete, the person is eligible to reapply for the new program.
Retains current law which prohibits an applicant who, within three years before filing an
application for eligiiity, has lnmsfimed or assigned real or personal property with the intent
to make the applicant eligible for the system.
Allows a county board of supervisors to adopt a definition of medically indigent which
includes persons or fkmily households not defined as medically indigent pursuant to this bill.
Prohibits a person who voluntarily leaves the system from submitting an application for
coverage until at least six months have elapsed. Furthermore, a person is not eligible for
services under section 36- 2905 unless that person has not been covered by a health care
program for not less than six months.
Premium Sharing:
Requires the director to establish the premium sharing amounts based on an applicant's
income level and the number of persons in the household. The premium percentages increase
exponentially as income levels increase.
The Administration shall establish a method of collecting the medically needy premiums,
which shall be paid to the entity determined by the Administration. Premiums are due on
the first day of each month prior to the month in which coverage begins.
Retr& ve Cover-
* Removes retroactive coverage. Currently, the Administration is retroactively liable for
payment for care which was provided two days prior to the date that a county determined the
person's eligibility. Under HI3 2508, the Administration would not be liable for an
individual's emergency hospitalization and medical care provided before a person is enrolled
in a health plan.
Eligibility Standards:
Repeals the eligibility standards for medically indigent services since the MN $ 3200 income
h i t includes those currently defined as m& cally indigent with annual income below $ 2500.
Residency Requirements:
States that the rules adopted by the director of AHCCCS regarding residency requirements
shall require that state residency is only established if the applicant shows that hdshe has lived
in this state for a minimum of two consecutive years immediately before the date of
application.
Eliminates the special eligibility officer's authority to grant residency based on proofs of
residency other than those enumerated in statute, to an applicant who has relocated to this
state fiom another state or foreign country within six months before the date of application.
Currently, the special eligibility officer can waive the statutory proof- of- residency
requirements at hidher discretion and grant residency to an applicant based on some other
proof of credible evidence of residency.
!
Requires the Administration to adopt rules for the imposition of a $ 5 copayment for MN
persons for each physician's office visit or home visit. The rules may not provide for a waiver
of copayments in appropriate circumstances.
Tobacco-
Provides, beginning October 1, 1997, that the Administration shall withdraw $ 50,000,000,
subject to legislative appropriation, fiom the medically needy account to pay for providing
health care services to those persons eligible for the demonstration project.
)! $
i ~$ 2hmttshe appropriation of $ 1,250,000 per month to the stabilization fund. As a result,
this S30,000,000 will become part of the $ 50,000,000 used to pay for the MN program.
Removes the requirement that the Administration withdraw the amount necessary to pay the
state share of costs for providing health care senices to any person who is eligible under the
current statutes.
Prepared by: Lisa Blqck, Wendy Zolotor
Appendix B
Summary of Tobacco Tax Accounts
SUMMARY OF ACCOUNTS
Tobacco Tax and Health Care Fund
FUNDS AVAILABLE
Revenue
ALLOCATION
DOR Administration
Transfer to AHCCCS- MEDICALLY NEEDY
Transfer to DHS- HEALTH EDUCATION
Transfer to DHS- HEALTH RESEARCH
Transfer to DOC Corrections
TOTAL ALLOCATION
AIICCCS Accounts
FY 1996 FY 1997 AUTHORIZATION FOR USE + AHCCCS Medically Needy Account
FUNDS AVAILABLE
Balance Forward S39.369.600 S101,523,600
Transfer In - Tobacco Tax and llealth Care Fund 89,036,200 - 1
TOTAL FUNDS AVAILABLE 128,405,800 - 189-, 760,800
ALLOCATION
Offset Loss in Federal Funding
Phase- Down of Quick Pay Discount
$ 10 M Hospital Reimbursmemt
Transplants
Transfer to AHCCCS- Medical Services Stab Fund
Transfer to AHCCCS- Prmium Sharing Demo Project Fund
Transfer to DHS- h4edically Needy
TOTAL ALLOCATION
RALANCE FORWARD
+ AHCCCS Medical Services Stabilization Fund
FUNDS AVAILAL3I. E
Balance Forward
2.02l. 200 Authorized for FY 1997
4,522,800 Authorized for FY 1997
~ o, ooo, ooo Authorized Tor FY 1997
8,365,800 Permanent per 36- 292 1
46.91 2.500 Permanent per 36- 292 1
20,000,000 Authorized for FY 1997, 1998, 1999
2 1,422,000 ( See DliS sunmary)
pFiGq
Transfer In - AIiCCCS- Medically Needy 14,065,400 46.91 2.500
TOTAL FUNDS AVAILABLE S 14,065,400 560,977,900
+ AHCCCS Premium Sharing Demo Project Fund
FUN1) S AVAILABLE
Balance Fonvard
Transfer In - AHCCCS- hiedically Ncedy
TOTAL FUNDS AVAILABLE
AL1, OCATION
Administrative and Analysis Expenses
BALANCE FORWARD
Department of Health Services Accounts
+ DHS Health Education Account
FUNDS AVAILABLE
Balance Forward
Transfer In - Tobacco Tax and llealth Care Fund
TOTAL FUNDS AVAILABLE
ALLOCATION
Operating Subtotal
BALANCE FORWARD
+ DHS Health Research Account
FUNDS AVAILABLE
Balance Forward
Transfer In - Tobacco Tax and llealth Care Fund
TOTAL FUNDS AVAILABLE
AI, I, OCATION
Disease Control Research Cornrniss~ on
DAI. ANCE FORWARD
+ DHS Medically Needy Allocations
FUNDS AVAILAB1, E
Balance Forward
Transfer In - AIKCCS- Medically Needy
TOTAL FUNDS AVAILABLE
A1, LOCATION
Primary Care Programs
Qualifying Community Healffi Centers
Telemcdicinc
hlentnl Health Programs for Non- Title 19
Detoxification Services
Renal Disease htanagement
Basic Children's Medical Services Program
Evaluations
TOTAL FUNDS EXPENDED
FY 1996 FY 1997 AUTHORIZATION FOR USE
$ 1 2,938,400 $ 30,322,100
9,709,300 I 5,000,000 Pennanent per 42- 1244; FY 1996 and FY
1997 use limited by Laws 1995, Ch 275
407.900 5,067,200 I'ennanent per 36- 275, FY 1996 use
Iinlrted hy laws 1995, Ch 275
S7,9') 6. I00 59.23 1.600
Perrilarlcrlr per 36- 292 1
I'ernlancrlt per 36- 292 1
Authorized for I: Y 1996, 1997, 1998
I'erinlulcr~ t pcr 36- 202 1
A11t11orr7. cdf o ~ IC Y I000 uld I997
I'crrrlarlcrlt per 36- 202 1
I'crinnnent pr 36- 292 1
I'crrlianent per 36- 292 1
BALANCE FORWARD
Appendix C
AHCCCS Premium Sharing Proposal Estimated Impact
William Mercer, Inc.
AHCCCS - PREMIUM SHARING PROPOSAL ESTIMATED IMPACT
G:\ DAT\ AZOWVI\ PREMCVG. XLS 1211 1/ 96 17: 45
Goal: Quantify the Risk of the Proposed Program
A. Approach:
1.) Program Design
2.) Population
Eligibility CriteriaIProcess
Enforcement
Marketing
Premium Sharing
Existing Programs
Current Population Survey DataIHarris Survey
3.) Benefit Package Commercial
4.) Service Delivery Network AHCCCSIHealth Care Group
Commercial HMOsIFee For Service
MSA/ Catastrophic Coverage
William M. Mercer, Inc. Page 2 Government Health Care Practice
--- -
AHCCCS - PREMIUM SHARING PROPOSAL ESTIMATED IMPACT c
Goal: Quantify the Risk of the Proposed Prograrn
C. Process;
o Assurne Uninsured Average Cost approxi~ riatelye qual to Insured
o Determine Cost S t r u c t i ~ r eo f Uriinsurecl Popcllatiori
o I stilllate Presentatiot~ t ~ Cy o st Level
o [) eterrnirie Acljt~ stedA verage Cost
o Select Base Capitati011 f3ate
o Adjust for Differences w i t l l i t ~ B ase Capitatioll Rate
o Apply Selectiori
o Adjust for AgeISex Rate Structc~ re
h ' i l l i a n l h4, hlerccr, l ~ i c
<=> I:;$' 2' < < <
i l . s $ g . Z ~ L. 1= z. - z= L1. .- 5, =, -. - - -
- m - m
, - E F , 5 e . g z 2
CDgo ( D .2- 2 - C. 1 - LC , <
> L o - - - o m c - 0 , -. 2 n 2.
Lo 0
0 il. 3 z , o
- C 2 = = --. 3 2 ; ' 2'
z ti- - W c 2 5 5 2
2 L1 = C _ 5. L
2 - - - ' 2 '
m z X - L? T;
O O n , 2 0 2 2 .
7 7 -
5. - 3 5 0 = -. - c 2 - - E
O C - - i-- ( D 2 - e5 E - -<.
C, - 2
Lo
7
-.
" \ - L -
Appendix D
Federal Poverty Levels
POVERTY LEVEL GUIDELINES
Appendix E
Poverty Levels and Percent of Income Table
Ma, lw- ft) tO
V l P W W h )
h ) V I w h ) V I w
- m O P w W I PPPPPP
0 0 0 0 0 0
i l i i i i ! l ! ! ! i !
1 $ 6.45
2
3 .
4
5
6
150% FPL
1
2
3
4 $ 234.00 $ 253.50 $ 273.00 $ 292.50
5
6 1- $ 312 60 $ 32389.665 .-$ 03684.7p0 l$ 3 9401.7653
200% FPL
250% FPL
1
2
3

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Final DRAFT
Premium Sharing Program
Implementation Recommendations
Recommended by:
The AHCCCS Premium Sharing
Demonstration Project
Implementation Committee
January 9, 1997
MEMO
TO: Members of the Premium Share Demonstration Project Working Committee
FROM: Representative Laura Knaperek
DATE: January 7, 1997
-
RE: DRAFT Recommendations report and legislation
Please find attached a copy of the DRAFT recommendations for the premium sharing
demonstration project. As you know we have been working very long and hard on these
recommendations and I look forward to discussing and finalizing them on January 9, 1997.
Although we have not finalized the recommendations, I have instructed staff to put together a
very preliminary DRAFT bill which is also enclosed. It is intended to be a working copy and
your input and suggestions are needed.
Thank you for all your hard work and dedication to this issue. I look forward to completing our
mandate with all of you who have participated in the planning and development of this draft.
Table of Contents
Background ......................................................................................... 1
. . Findings ................................................................................................ 3
Recommendations. ................................................................................... 5
Proposed Legislation .................................................................................... 11
Appendices
A. Laws 1996, Chapter 368 ( HB 2508)
B. Summary of Tobacco Tax Accounts
C. AHCCCS Premium Sharing Proposal Estimated Impact, William
Mercer, Inc.
D. Federal Poverty Levels
E. Poverty Levels and Percent of Income Table
House Bill 2508 and Senate Bill 1219 were introduced during the second regular session of the Forty-second
Legislature ( 1996). When combined into a single plan. the legislation proposed the creation
of a premium sharing program to provide uninsured low income and chronically ill individuals with
access to health care services. Both plans required participants to share the cost of the premium with
the state. The state portion was to be fbnded using the 1994 voter approved tobacco tax revenues.
Both proposals required Arizona's existing Medicaid providers ( AHCCCS providers) to deliver the
health care services.
As introduced. SB 12 19. sponsored by Senator Day. allowed individuals with a chronic illness who
had been classified as MNM eligible for the preceding twelve consecutive months and their eligible
f d y members to continue to receive AHCCCS benefits through participation in a premium sharing
program. The goal of the proposed program was to ensure that indivduals who have a chronic illness
maintain continuous access to health care services.
As introduced, HB 2508, sponsored by Representative Knaperek and Representative Weiers, required
most individuals in the MNM program to pay a portion of the cost of the premium paid by the state
to entities that provide health care services to MNIMI recipients. Additionally, since much of the
burden for funding the MNM progranl was being removed from the state, the bill proposed that
additional persons be made eligible for the program.
Neither HE3 2508 nor SB 12 19 passed in their original form. After much discussion. a compromise
was reached. The conlpromise legislation, amended onto House Bill 2508, combined the provisions
of both bills. Laws 1996, Chapter 368 ( HB 2508) established the Arizona health care cost
containment system premium sharing demonstration project implementation committee. The
legislation required the committee to make recommendations to the governor and the legislature
regarding the inlplenlentation of a prenlium sharing demonstration program to begin October 1, 1 997.
Using the provisions of the original HB 2508 and SB 12 19 as the primary framework, the committee
was directed to make recommendations for the program including who would be eligible to
participate. The demonstration program was to allow eligible persons access to medical services
provided by system providers through a cost- sharing arrangement with the AHCCCS administration.
The committee was directed to recommend eligibility criteria based on household income,
citizenship. residency, insurance status. and resources.
Members of the premium sharing demonstration project implementation committee are:
Senator Brewer and Representative Knaperek. co- chairs. and Senator Patterson, Senator Kennedy,
Representative Weiers and Representative Horton. At the first meeting, the committee members
decided to fornl two working groups: one to make recommendations regarding the service package
and the other to make recommendations regarding the structure and administration of the premium
sharing demonstration project. The working groups held more than twenty public hearings. Experts
from the public and private sector were invited to actively participate in the creation of the
implementation plan. Individuals representing private organization, public agencies and themselves
participated in the working group meetings. Participants included representatives fiom:
APIPA
APS
Arizona Association of Behavioral Health Programs
Arizona Association of County Health Centers
Arizona Association of Managed Care Plans
Arizona Consortiun~ fo r Children with Chronic Illness
Arizona Health Care Cost Containment System
Arizona Hospital Association
Arizona Medical Association
Arizona Physicians
Arizona Podiatric Medical Association
Arizona Public Policy Forum on Transplantation
Children's Action Alliance
Children's Health Care Coalition
Department of Administration
Department of Economic Security
Department of Health Services
Department of Insurance
Health Care Group
Legislative Council
March of Dimes
Maricopa County
NFIB
Samaritan Health Systenl
St. Joseph's HospitaVMercyCare
University Medical Center
The committee and working groups focused on eligibility requirements, contents of the service
package, premium rates and delivery systems. When reviewing eligibility criteria for project
participants, the committee specifically reviewed incomes at or below 300% of the federal poverty
guidelines. The committee reviewed a number of service packages including those provided for state
employees, health care group, AHCCCS MNIMI and AHCCCS Title XIX mandatory services, the
basic benefit package, and benefit packages provided by other states that have premium sharing
programs. When reviewing packages provided by other states. the committee noted that some other
states had reduced their benefit package after implementing their premium sharing program. This was
done to reduce the individual cost of running the program thus allowing more indivduals to
participate. The various delivery systems the committee reviewed were those provided through
AHCCCS, the Department of Insurance and Health Care Group. Additionally, the committee
directed the Arizona health care cost containment system administration to conduct an actuarial study
to provide estimates relating to presentation rates and potential premium sharing costs based on
parameters set by the conunittee.
In Arizona approximately 600,000 adults and children are without health insurance. Adults make
up the largest uninsured population ( 450.000) and children make up the remainder ( 150.000).
October 1996 Flinn Foundation
Since 1989. the number of uninsured Arizonans increased by 33%, out pacing the state's
estimated population growth of 2 1 %. Octokr 1996 Flinn Foundation
The predominant characteristic of the uninsured is low income, and not lack of employment.
About 85% of Arizona's uninsured adults. and 92% of uninsured children, live in households with
an employed main wage earner. October 1996 Flinn Foundation
About 75% of Arizona's 450.000 uninsured adults had been without health insurance for at least
two years at the time of the survey. October 1996 Flinn Foundation
Most uninsured persons cite the cost of insurance as the reason they do not have it. October 1996
Flinn Foundation
Roughly 100 million Americans suffer fi- om chronic illnesses such as diabetes, heart disease or
arthritis. Most of the chronically ill ( 84.4 million) are between the ages of 18 and 64. November
12. 1996 Journal of Amcrican Mcdicinc
On average, chronically ill patients incur annual medical bills that are more than triple the medical
bills incurred by people without chronic illnesses - $ 3.074 per person compared to $ 817.
Chronically ill individuals account for four out of five days spent in hospital admissions. November
12. 1996 Journal of American Mcdicinc
For 1998. it is prqjected that most of the uninsured adults and children will live in households
with an income that is less than 200% of the FPL. Octobcr 1996 FIinn Foundation
Many other states such as Hawaii. Minnesota. New Jersey, Florida, Oregon. Rhode Island,
Vermont. Tennessee, Pe~ lsylvaniaa nd Washington have premium sharing programs that provide
health insurance coverage to low income families and require participants to contribute a portion
of the premium.' The state subsidizes the remaining portion of the premium. AIICCCS SUN^!:
7- 1998 Projected Unins ured Populations
Total 1 271,000 1
O/ O of Federal
Poverty Level
Sources: AHC'CC'S, C'urrent Populations Survey, I
Children Under 21
Number O/ O
Recommendations
7.52
5.56
5.46
7.26
3.05
2.09
3.03
33.99%
I. Administration
Adults
Number %
A. Health Care Group shall be the entity responsible for administrative functions
related to the Premium Sharing Program such as collecting the participants
premiums, billing, processing, dis- enrolling members who are delinquent on their
payments and collecting member data.
Total
Number %
1993, 1994, 1995; C'urrent Population Reports, The Bureau of the Census.
95,000
51,000
85,000
82,000
57,000
49,000
106,000
525,000
Health Care Group ( HCG) has experience in administrating a program with similar
responsibilities and HCG administrators indicated that they are able to carry out this
recommendation.
B. The demonstration project shall be conducted in the following four counties:
Maricopa, Pima, Pinal and Cochise.
11.97
6.35
10.74
10.32
7.14
6.19
13.30
66.00%
HE3 2508 requires the demonstration project to take place in two urban counties and two
rural counties.
11. Eligibility
155,000
95,000
129,000
140,000
81,000
66,000
130,000
796,000
A. The program shall have two components: one for participants who do not have a
chronic illness and one for participants who do have a chronic illness. All
participants shall undergo an income test. To be eligible for the premium sharing
19.49
11.91
16.20
17.59
10.19
8.28
16.33
99.99%
program, household income for participants who do not have a chronic illness shall
be less than 200% of the FPL; household income for participants with a chronic
illness shall be less than 400% of the FPL. Chronically ill participants with a
household income between 200% and 400% of the FPL shall pay the full cost of their
premium. Chronically ill participants shall be required to have been on the MN/ MI
program for a period of at least one year after which they may apply for the
premium sharing program. The demonstration project shall include a cap of 200
persons for the chronically ill population. Once a participant has been determined
to be eligible for the program, the person's family is also considered eligible.
HB 2508 requires the Committee to establish a Premium Sharing Demonstration Program.
Persons who fall below 300% of the FPL may be eligible for the Demonstration Project.
Of the 1998 projected uninsured population, over 65% ( 530,000 individuals) are below
200% of the FPL. Since it is estimated that the Demonstration Project will serve
approximately 12,000 to 14.000 individuals. the committee decided to limit participation
to persons with an income of less than 200% of the FPL.
Although no state data exists that demonstrates the number of chronically ill persons in
Arizona. national data shows that roughly 100 million Americans suffer fiom chronic
illnesses such as diabetes. heart disease or arthritis. This attributes to about 84.4 million
individuals; most are between the ages of 18 and 64. Because of the costly nature of
chronic illnesses and the devastating affect they can have on a family's economic standing,
the committee recommends that the income level be increased to 400% for participants
who suffer from a chronic illness.
B. Income shall be calculated by multiplying by four the applicant's income for the
three months immediately prior to the application for eligibility.
For continuity and ease of administrative operation, the income test process should be
similar to the income test currently being conducted by eligibility workers. Therefore, the
income test calculation shall be similar to the MNIMI income test.
C. Employment shall not be a requirement for participation.
Since household income is the test of eligibility and not a person's employment status,
employment shall not be a requirement. Recent studies indicate that about 85% of
Arizona's uninsured adults. and 92% of Arizona's uninsured children. live in households
with an employed wage earner.
D. In order to be eligible for the demonstration project participants shall not have
access to other health care programs.
Since the goal of the demonstration project is to provide health care coverage to the
working poor and to individuals who otherwise have no access to coverage. persons who
are eligible for other government subsidized health care programs shall be ineligible for the
demonstration project.
E. Eligibility shall be determined according to presumptive eligibility criteria which
means information collected by the applicant is presumed to be accurate and
truthful, with minimal verification. Participants who falsify information in order to
qualify for the program shall be responsible for all fraudulent claims and
immediately disqualified from the program.
Participants shall be obligated to provide specific information in order to determine
eligibility however, an overly administrative intensive eligibility process could be costly and
burdensome.
F. Eligibility may be conducted at the following locations:
1) County sites;
2) DES locations;
3) Community Health Clinics ( conducted by DES workers).
Since the counties. DES and the community health clinics currently conduct some type of
eligibility process, they have the expertise and experience for conducting eligibility.
According to the county, approximately 45.000 applicants for state and county health
programs are denied eligibility each year; fifty percent are denied because they are over
income. Many of these individuals may qualifj and may be interested in participating in
the premium sharing program.
G. Participants shall demonstrate that they have gone " bare" ( had no health care
coverage) for a period of at least twelve months in order to be eligible for the
demonstration project except for AHCCCS members who transfer to the Premium
Sharing Program. Additionally, criteria shall be established specifying alternative
" bare" periods according to the participant's circumstance.
HB 2508 requires an individual to go bare for a minimum of six months before becoming
eligible for the Premium Sharing Demonstration Program. Criteria shall be established
determining the necessary bare period according to the participants condition. Moving
the AHCCCS recipient to the Premium Sharing Program without a break in health care
coverage provides continuity of care, encourages self- sufficiency and empowers the
participant to improve employment opportunities. Furthermore. flexibility of the " bare"
period shall be offered according to the participants special circumstance.
H. Participants shall undergo a financial evaluation evew twelve months to determine
program eligibility and a financial review after six months.
A twelve month eligibility period was justzed with a six month eligibility review. This will
assist in minimizing the administrative costs while assuring those eligible remain in the
program and those ineligible are removed or pay the full premium.
I. Participants who voluntarily leave the Premium Sharing Program shall not be
eligible to re- enroll for a period of 12 months.
To prevent individuals tiom joining the program only when they are sick and leaving when
they are well, a waiting period must exist. This will attract people who desire ongoing
health care coverage regardless of their current medical condition.
J. An enrollment cap shall be placed on the demonstration project.
Enrollment shall be limited during the demonstration project phase so that annual premium
expenditures by the state for the program do not exceed the annual appropriation to the
program.
Quality Review
A. AHCCCS shall conduct the quality review process and shall determine whether the
counties' eligibility determinations are accurate and timely.
AHCCCS currently conducts quality review and this review process could be extended to
each entity performing eligibility determinations for the Premium Sharing Program. In
addition. since AHCCCS health plans are the insurers for this program AHCCCS's quality
of care review could be extended to this program.
B. An evaluation of the Premium Sharing Demonstration Program shall be conducted
by Legislative Council.
The final version of HB 2508 did not contain language addressing how the program is to
be evaluated. A suggested process is as follows:
1. The AHCCCS administration shall prepare an annual report of the progress and
problems incurred relating to the program start- up. administration and expenditures
for the Joint Legislative Committee fbr the Arizona Health Care Cost Containment
System ( a statutory legislative committee).
2. During each year of the demonstration project, the Legislature should direct the
Legislative Council to report on program effectiveness, efficacy, participant
satisfaction. enrollment dormation. expenditures. and progress in reducing the
number of uninsured people in Arizona.
Legislative Council has been an active participant in the development of the Demonstration
Project and has told the committee it would be willing to take on these program evaluation
responsibilities.
IV. Service Package Recommendations
A. Premium sharing participants shall be provided with the same benefit package
offered to the medically needy population with the following exceptions:
I) Transplants shall be excluded;
2) Limited behavioral health services shall be provided with a maximum of ten days
of inpatient behavioral health services annually; and
3) Participants shall be charged a copayment for each visit to the doctor.
After completion of the initial phase of the demonstration project the committee
shall review the possibility of adding additional services such as transplants.
The Working Group reviewed in detail the benefits provided through AHCCCS. Health
Care Group. the state employees benefit packages and the Basic Benefit Plan. After much
discussion, the working group recommends that the Premium Sharing Demonstration
Project benefit package be based on the MNM services package with some exceptions.
B. The AHCCCS health care delivery system and existing providers shall be used for
the method of providing health care services.
The working group debated the benefits of using an established program vs. creating a new
program to deliver services. In order to provide a comprehensive package to the largest
number of people while maintaining administrative costs, the program should use an
already established program to deliver its services. Thus, the AHCCCS health care
delivery system was selected.
One problem with using Health Care Group is that to provide services to Health Care
Group, a health plan must be a contractor with AHCCCS. The number of health plans
contracting with AHCCCS ( 14 providers/ 457,798 participants) is much larger than in
Health Care Group ( 4 prot. idersl32.900 participants). Concern was raised as to whether
or not the existing Health Care Group providers could cover an additional 12.000 - 14,000
individuals. In some rural areas. in particular. very few individuals currently participate in
Health Care Group. Additionally. Health Care Group does not provide coverage for
numerous pre- existing conditions until a person has been in the program for twelve
months. Pregmancy related care is not covered during the first ten months of enrollment.
The working group strongly recommends that pregnancy- related care be provided
immediately upon enrollment and that exclusion of pre- existing conditions be carefully
reviewed.
The Basic Health Plan is a guide that details the minimum components that must be
included in a benefit package ofEered in Arizona. It does not have a dedicated delivery
system like AHCCCS or Health Care Group.
C. AHCCCS contract providers who choose to deliver services to the demonstration
project participants shall develop a marketing plan to promote the program.
In order to enhance the enrollment and encourage marketability of the Premium Sharing
Program and to provide coverage to a maximum number of participants. providers who
serve the program participants must develop a marketing plan to promote the program.
This will ensure the program is publicized and healthy individuals are given the opportunity
to participate.
D. Pregnancy should not be considered a " pre- existing condition" for the purpose of
refusing services. There should be some flexibility when determining pre- existing
conditions.
Pregnancy- related care should be provided as early as possible. Thus, any plan that is
selected should provide such care from the time an individual enrolls in the program.
The working group expressed concerns about coverage for persons with pre- existing
conditions. While not identlfLing those that should be covered immediately, the group felt
that if some conditions were excluded fiom coverage. at the very least there should be
some flexibility for exceptions. Chronically ill individuals and individuals who are receiving
services through AHCCCS were two groups that were mentioned as " exceptions" to the
rule.
E. Participants shall be required to enroll their whole family; enrolling only one child
or one family member shall not be permitted.
In order to encourage healthy people to enroll in the demonstration pro- ject rather than to
wait until one person in the hmily becomes ill and dependant on health care services. the
whole household shall be required to enroll.
V. Premiums
A. The AHCCCS administration shall establish the total premium costs and shall
determine the premium that each enrollee shall pay based on the enrollee's gross
income and household size. The premium shall not exceed four percent of the
enrollee's household gross income.
HB 2508 required AHCCCS to contract with an actuarial to assist the committee in
developing premium rates. As a result. AHCCCS contracted with William Mercer Inc. to
analyze the Premium Sharing Demonstration program given the current parameters and the
target population. Mercer has developed preliminary rates ( see appendix C) for the
demonstration project. Therefore, the rates for the premium sharing program shall resemble
the rates developed and presented to the working group on December 1 1, 1996.
After reviewing the various incomes and different household sizes the working group engaged
in a long discussion of affordability and recommended that the premium rate for the e t i t b k e
not exceed 4% of the participant's gross income.
DRAFT LEGISLATION
Note: This draft has not been reviewed by Legislative Council. Technical and conforming
changes are necessary.
DRAFT
AN ACT
ESTABLISHING THE PREMIUM SHARING DEMONSTRATION PROJECT
Be it enacted by the Legislature of the State of Arizona:
Section 1. Premium Sharin- g Demonstration Proiect: Implementation Requirements
A. Beginning October 1. 1997, the premium sharing demonstration project shall be
implemented to provide uninsured persons access to medical services provided by providers
through the Arizona health care cost containment system administration. Eligible persons shall be
required to pay a copayment and a monthly premium to obtain access to such medical services.
The premium sharing demonstration project h d , established pursuant to 36- 2923. Arizona
Revised Statutes, shall be used to subsidize portions of the enrollee's total premium costs. The
total amount of state monies that may be spent in any fiscal year by the administration for the
premium sharing demonstration project shall not exceed the amount appropriated or authorized
by section 36- 2923, Arizona Revised Statutes. Enrollees who meet the eligibility requirements
shall receive medical services if they pay the required monthly premium costs minus the state
subsidized amount. pay all of their copayment charges. and comply with all other provisions of
this section.
B. The director of the Arizona health care cost containment system administration shall
administer and implement the demonstration project The director has hll operational authority
and shall use health care group, established pursuant to 36- 2912, Arizona Revised Statutes, to
carry out the administrative hnctions of the demonstration project and shall:
1. Establish a process for billing. collecting the enrollee's copayments, and monthly
premiums.
2. Maintain enrollee data information.
3. Establish an aggressive dis- enrollment process for enrollees who default on paying
premiums or do not comply with premium payment deadlines. The administration shall
permanently remove an enrollee from the project if the enrollee fails to make the required
payments within a specified period of time as prescribed by this section. The administration may
adopt rules that allow for temporary probationary status for enrollees whose payments are
delinquent more than three months.
4. Establish a system for tracking enrollee's copayment collection and noncollection.
C. For the purposes of this section, " enrollee-' means a resident of this stateand the
Maricopa, Pima. Pinal or Cochise counties pursuant to 35- 2903.01. who is a citizen of the United
States and meets the alienage requirements that are established pursuant to title XIX of the social
security act and who:
1. Has been determined as an ineligible person pursuant to section 1 1- 297 or 36- 2901
subsection 1. Arizona Revised Statutes.
2. Submits an application for the premium sharing demonstration project as prescribed by the
administration.
3. Has an annual household gross income that does not exceed two hundred percent of the
federal poverty guidelines as published annually by the United Sates Department of Health and
Human services. Persons who are chronically ill and uho have been eligible for health care
services pursuant to 11- 297 or 36- 2905. Arizona Revised Statutes for twelve consecutive months
may have a household income that does not exceed four hundred percent of the federal povertj
guidelines as published annually by the United Sates Department of Health and Human services.
Chronically ill persons who have incomes between two hundred percent and four hundred percent
shall pay the full premium. No state subsidy shall be contributed to share in the cost of an!
enrollee whose gross income exceeds two hundred percent of the federal poverty guidelines as
published annually by the United States Department of Health and Human services.
4. Demonstrates that the enrollee has not been insured by a health care program at any time
during the twelve months preceding the date of application. This paragraph does not apply to an)
applicant who has been disenrolled pursuant to section 1 1- 297 or 36- 2901. at the time of
redetermination.
5. Agrees to share in the cost of the premiums established by the Arizona health care cost
containment system administration pursuant to subsection H of this section.
6. Agrees to cooperate fully with the administration in the determination of household
income for the purposes of determining gross income and premium costs.
7. Not receive social security or supplemental security income payments associated with
blindness or disabilit) .
8. Be ineligible for coverage throug the veterns' administration for the condition or
conditions in question.
9. Not have been found by a governmental agency or a court of law to have committed an
act of fiaud or abuse with respect to any cash or in- kind benefit program including aid to families
with dependent children, general assistance. food stamps. a state medicaid program or any state or
county sponsored medical assistance program.
10. Not be receiving federal medical benefits.
D. For the purposes of determining eligibilitj. the director of the administration shall
develop:
1 . A presumptive eligibility application process for demonstration project applicants to be
used by participating counties and the department of economic security Gross annual income
shall be calculated by multiply by four the applicant's income for the three month immediately
prior to the applicant for eligibility for the premium sharing demonstration pro- ject and:
2. A biannual eligibility review process for determining eligibility.
E. An enrollee shall receive health care services available to the medically needy as
prescribed bj section 1 1- 297. Arizona Revised Statutes. except that enrollees shall:
I . Paj $ 8.00 per physician visit.
2. Pay $ 25.00 for each emergency room visit except that the fee shall be waived if the person
is admitted to the hospital.
3. Pal $ 50 for each emergency room visit that is for a non- emergency use.
3. Pay $ 3.00 for each prescriptions that is filled with a generic drug and fifty percent of the
cost of each prescription that is filled with a brand name pharmaceuticals.
5. Pay $ 8.00 for the each lab and X- ray service.
6. Re eligible for behavioral health services as follows.
a. Pay $ 50.00 per behavioral health admission to an inpatient behavioral facilit?. Enrollees
are eligible for a maximum of ten days of inpatient behavioral health services annually.
b. Pay $ 1 0.00 for individual out patient mental health services.
c. Pay $ 5.00 for outpatient mental health group services.
7. Not be eligible to receive transplant services.
For the purposes of this subsection. " copayrnent" means the monetary amount specified in this
subsection which the enrollee pays the contracting provider at the time services are rendered.
F. Providers may withhold medical services to enrollees that do not pay copayments in full at
the time the service is rendered.
G. The director of the administration shall require as a condition of a contract with any
provider that a marketing plan be developed to reach persons eligible pursuant to this section.
H. For the purposes of the demonstration project. the administration shall establish the
total premium costs and shall establish the portion of the monthly premium that each enrollee
contribution shall pay based on the following:
1. The enrollee's gross income and household size. The premium shall not exceed four
percent of the enrollee's household gross income.
2. The total amount of hnds available in the premium sharing demonstration project hnd
established pursuant to 36- 2923, Arizona Revised Statute. The total amount of state monies that
may be spent in any fiscal year by the administration for the premium sharing demonstration
project shall not exceed the amount appropriated or authorized by section 36- 2923, Arizona
Revised Statutes
3. Initial premiums shall be based on preliminary rates established by William Mercer in the
December 20, 1996 report submitted to the premium sharing demonstration project committee.
I. A11 enrollees shall pay the required enrollee premium payment and full copayrnent charges
established by the administration.
J. If the federal waiver ( Prop. 203) is approved enrollees in the premium sharing
demonstration project who have incomes less than one hundred percent of the federal poverty
guidelines as published annually by the United Sates Department of Health and Human services
shall transfer to that program.
Section 2. Enrollment cap
The administration shall limit enrollment in the demonstration project so that annual premium
expenditures by the state for the program do not exceed the annual appropriation to the program
pursuant to 36- 2923, Arizona Revised Statutes. ' I'he administration shall determine the number of
demonstration project participants that can be enrolled within this parameter. The administration
shall limit the number of chronically ill participants to two hundred.
Section 3. Rules
The Arizona health care cost containment system administration shall develop rules in
accordance with the provisions of this act and is exempt fi- om the rule making requirements of
title 41. chapter 6, Arizona Revised Statutes. for the purpose of developing these rules. The
administration shall conduct public hearings. including at least two in counties with a population
of less than five hundred thousand persons according to the most recent United States decennial
census. before it adopts exempted rules. The administration shall publish adopted rules pursuant
to title 41. chapter 6. Arizona Revised Statutes.
Section 4. Reports
A. Beginning in 1997. the director of the Arizona health care cost containment system
administration shall report on or before December 15 of each year. to the premium sharing
demonstration project implementation committee on the implementation and development of the
premium sharing demonstration project. The administration shall submit a report to the governor.
the president of the senate and the speaker of the house of representatives. The director of the
Arizona health care cost containment system administration shall include in the report
recommendations regarding the demonstration project. The report shall include recommendations
on transitioning premium sharing demonstration project enrollees who have incomes less than one
hundred percent of the federal poverty guidelines as published annually by the United Sates
Department of Health and Human services, into the new program, if the federal waiver ( Prop.
203) is approved
B. Beginning in 1997, the legislative council shall submit a report on or before December
15 of each year. and make recommendations to the premium sharing demonstration project
implementation committee. The report shall contain the following information regarding the
demonstration project:
1 . An analysis of client satisfaction.
2. Program enrollment information.
3. The average annual income of the enrollee.
4. The annual medical service expenditure.
5. The total monies collected from enrollees.
6. Information necessary to analyze and evaluate the project's effectiveness or impact.
Section 5. Delayed Repeal
This act is repealed from and afier September 30. 2000.
Appendix A
Laws 1996, Chapter 368 ( HB 2508)
S e n a t e E n g r o s s e d H o u s e B i l l
S t a t e o f A r i z o n a
H o u s e o f R e p r e s e n t a t i v e s
F o r t y - s e c o n d L e g i s l a t u r e
S e c o n d R e g u l a r S e s s i o n
1 9 9 6
CHAPTER 368
FILED
Jane Dee Hull
Secretary of State
HOUSE BILL 2508
AN ACT
AMENDING T I T L E 3 6 , CHAPTER 2 9 , ARTICLE 1, ARIZONA REVISED STATUTES. BY ADDING
SECTION 3 6 - 2 9 0 7 . 0 8 : AMENDING SECTION 3 6 - 2 9 2 1 . ARIZONA REVISED STATUTES;
AMENDING SECTION 3 6 - 2 9 2 2 , ARIZONA REVISED STATUTES; AMENDING T I T L E 3 6 .
CHAPTER 2 9 . ARTICLE 1. ARIZONA REVISED STATUTES, BY A D D I N G S E C T I O N 3 6 - 2 9 2 3 ;
AMENDING LAWS 1 9 9 6 . F I F T H SPECIAL SESSION, CHAPTER 5. SECTION 7; PROVIDING
FOR CONDITIONAL DELAYED REPEAL; MAKING AN APPROPRIATION; RELATING TO THE
MEDICALLY NEEDY ACCOUNT OF THE TOBACCO TAX AND HEALTH CARE FUND.
Be i t e n a c t e d by t h e L e g i s l a t u r e o f t h e S t a t e o f A r i z o n a :
S e c t i o n 1. T i t l e 3 6 , c h a p t e r 2 9 , a r t i c l e 1. A r i z o n a R e v i s e d S t a t u t e s ,
i s a m e n d e d by a d d i n g s e c t i o n 3 6 - 2 9 0 7 . 0 8 . t o r e a d :
3 6 - 2 9 0 7 . 0 8 . B a s i c c h i 1 d r e n ' s m e d i c a l s e r v i c e s roara am;
d e f i n i t i o n
A. BEGINNING ON OCTOBER 1. 1 9 9 6 . THE BASIC CHILDREN'S MEDICAL SERVICES
PROGRAM I S ESTABLISHED TO PROVIDE GRANTS TO HOSPITALS THAT EXCLUSIVELY SERVE
THE MEDICAL NEEDS OF CHILDREN OR THAT OPERATE PROGRAMS DESIGNED PRIMARILY FOR
CHILDREN. THE DIRECTOR OF THE DEPARTMENT OF HEALTH SERVICES. PURSUANT TO AN
INTERGOVERNMENTAL AGREEMENT WITH THE DIRECTOR OF THE ARIZONA HEALTH CARE COST
CONTAINMENT SYSTEM AND SUBJECT TO THE A V A I L A B I L I T Y OF MONIES. SHALL IMPLEMENT
AND OPERATE T H I S PROGRAM ONLY TO THE EXTENT THAT FUNDING I S A V A I L A B L E AND HAS
BEEN S P E C I F I C A L L Y DEDICATED FOR THE PROGRAM.
B. TO RECEIVE A GRANT UNDER T H I S SECTION, A HOSPITAL S H A L L S U B M I T AN
A P P L I C A T I O N AS PRESCRIBED BY THE DIRECTOR OF THE DEPARTMENT OF HEALTH
SERVICES I N A REQUEST FOR PROPOSAL THAT I N D I C A T E S TO THE DIRECTOR'S
SATISFACTION THAT THE APPLICAKT AGREES TO:
1. USE GRANT PROGRAM MONIES TO ENHANCE THE A P P L I C A N T ' S PROVISION OF
A D D I T I O N A L MEDICAL SERVICES TO CHILDREN AND TO IMPROVE THE A P P L I C A N T ' S
H. B. 2 5 0 8
A B I L I T Y TO DELIVER I N P A T I E N T . OUTPATIENT AND SPECIALIZED C L I N I C A L SERVICES
TO INDIGENT. UNINSURED OR UNDERINSURED CHILDREN WHO ARE NOT E L I G I B L E TO
RECEIVE SERVICES UNDER T H I S ARTICLE.
2. ESTABLISH AND ENFORCE A S L I D I N G FEE SCALE FOR CHILDREN WHO ARE
PROVIDED SERVICES WITH GRANT MONIES.
3. ACCOUNT FOR MONIES COLLECTED PURSUANT TO PARAGRAPH 2 OF T H I S
SUBSECTION SEPARATELY FROM ALL OTHER INCOME I T RECEIVES AND TO REPORT T H I S
INCOME ON A QUARTERLY BASIS TO THE ADMINISTRATION.
4. USE THE GRANT TO SUPPLEMENT MONIES ALREADY AVAILABLE TO THE
APPLICANT.
5. MATCH THE GRANT AS PRESCRIBED BY THE DIRECTOR BY RULE WITH PRIVATE
MONIES THE APPLICANT HAS PLEDGED FROM PRIVATE SOURCES. THE DIRECTOR SHALL
WAIVE T H I S REQUIREMENT I F THE APPLICANT I S SEEKING THE GRANT TO QUALIFY FOR
A PRIVATE OR PUBLIC GRANT FOR THE DELIVERY OF INPATIENT, OUTPATIENT OR
SPECIALIZED C L I N I C A L CARE OF INDIGENT. UNINSURED OR UNDERINSURED CHILDREN WHO
ARE NOT E L I G I B L E TO RECEIVE SERVICES UNDER T H I S ARTICLE.
6. PROVIDE A MECHANISM . TO ENSURE THAT GRANT PROGRAM MONIES ARE NOT
USED FOR CHILDREN WHO ARE E L I G I B L E FOR SERVICES UNDER T H I S ARTICLE.
7. NOT USE GRANT MONIES TO FUND THE PROVISION OF EMERGENCY ROOM
SERVICES.
C. BY CONTRACT. THE DIRECTOR OF THE DEPARTMENT OF HEALTH SERVICES
SHALL REQUIRE A GRANTEE TO:
1. ANNUALLY ACCOUNT FOR ALL EXPENDITURES I T MAKES WITH GRANT PROGRAM
MONIES DURING THE PREVIOUS YEAR.
2. AGREE TO COOPERATE WITH ANY AUDITS OR REVIEWS CONDUCTED BY T H I S
STATE.
3. AGREE TO THE REQUIREMENTS OF THIS SECTION AND OTHER CONDITIONS THE
DIRECTOR DETERMINES TO BE NECESSARY FOR THE EFFECTIVE USE OF GRANT PROGRAM
MONIES.
D. THE DIRECTOR OF THE DEPARTMENT OF HEALTH SERVICES MAY L I M I T EITHER
OR BOTH THE GRANT AMOUNT PER CONTRACT OR THE NUMBER OF CONTRACTS AWARDED.
I N AWARDING CONTRACTS TO Q U A L I F I E D APPLICANTS THE DIRECTOR SHALL CONSIDER:
1. THE AMOUNT OF MONIES AVAILABLE FOR THE GRANT PROGRAM.
2. THE NEED FOR GRANT MONIES I N THE AREA SERVED BY THE APPLICANT AS
STATED BY THE APPLICANT I N THE RESPONSE TO THE REQUEST FOR PROPOSALS AND AS
RESEARCHED BY THE ADMINISTRATION.
3. THE NUMBER OF CHILDREN ESTIMATED TO BE SERVED BY THE APPLICANT WITH
GRANT PROGRAM MONI ES.
4 . THE SERVICES THAT WILL BE PROVIDED OR MADE AVAILABLE WITH GRANT
PROGRAM MONIES.
5. THE PERCENTAGES OF GRANT MONIES THAT THE APPLICANT INDICATES WILL
BE RESERVED FOR ADMINISTRATIVE EXPENDITURES. DIRECT SERVICE EXPENDITURES AND
MEDICAL CARE PERSONNEL COSTS.
, H. B. 2 5 0 8
6. THE F I N A N C I A L AND PROGRAMMATIC A B I L I T Y OF THE APPLICANT TO MEET THE
CONTRACT'S REQUIREMENTS.
E. I F THE DEPARTMENT OF HEALTH SERVICES DETERMINES THAT A HOSPITAL HAS
USED GRANT MONIES I N V I O L A T I O N OF T H I S SECTION I T SHALL P R O H I B I T THAT
HOSPITAL FROM R E C E I V I N G A D D I T I O N A L GRANT PROGRAM MONIES U N T I L THE H O S P I T A L
REIMBURSES THE DEPARTMENT. THE DEPARTMENT SHALL IMPOSE A N I N T E R E S T PENALTY
AS PRESCRIBED BY THE DIRECTOR OF THE DEPARTMENT OF H E A L T H S E R V I C E S BY RULE.
THE DIRECTOR SHALL TRANSMIT PENALTIES COLLECTED UNDER T H I S SECTION TO THE
STATE TREASURER FOR DEPOSIT I N THE MEDICALLY NEEDY ACCOUNT OF THE TOBACCO TAX
AND HEALTH CARE FUND.
F. THE DIRECTOR OF THE DEPARTMENT OF HEALTH SERVICES MAY EXPEND MONIES
FROM THE MEDICALLY NEEDY ACCOUNT OF THE TOBACCO TAX AND HEALTH CARE FUND
TRANSFERRED PURSUANT TO SECTION 3 6 - 2 9 2 1 . SUBSECTION A . PARAGRAPH 7 FOR THE
PURPOSE OF FUNDING EVALUATIONS OF THE GRANT PROGRAM ESTABLISHED BY T H I S
SECTION. THE DIRECTOR SHALL ENSURE THAT ANY EVALUATION I S STRUCTURED TO MEET
AT LEAST THE BASE REQUIREMENTS PRESCRIBED I N SECTION 3 6 - 2 9 0 7 . 0 7 .
G. THE DIRECTOR OF THE DEPARTMENT OF HEALTH SERVICES MAY EXPEND MONIES
FROM THE MEDICALLY NEEDY ACCOUNT OF THE TOBACCO TAX AND HEALTH CARE FUND
TRANSFERRED PURSUANT TO SECTION 3 6 - 2 9 2 1 . SUBSECTION A , PARAGRAPH 7 FOR
A D M I N I S T R A T I V E COSTS ASSOCIATED WITH THE ESTABLISHMENT OR THE OPERATION OF
THE GRANT PROGRAM. THE AMOUNT WITHDRAWN ANNUALLY FOR GRANT PROGRAM
A D M I N I S T R A T I V E COSTS SHALL NOT EXCEED TWO PER CENT OF THE SUM OF ANY
TRANSFERS OF MONIES MADE PURSUANT TO SECTION 3 6 - 2 9 2 1 AND ANY APPROPRIATION
OF MONIES FOR THE S P E C I F I E D PURPOSE OF SUPPORTING THE NONENTITLEMENT B A S I C
C H I L D R E N ' S M E D I C A L SERVICES PROGRAM ESTABLISHED I N T H I S SECTION.
H. THE DEPARTMENT OF HEALTH SERVICES SHALL D I R E C T L Y A D M I N I S T E R THE
GRANT PROGRAH AND ALL CONTRACTS ESTABLISHED PURSUANT TO T H I S SECTION. THE
DIRECTOR OF THE DEPARTMENT OF HEALTH SERVICES SHALL P U B L I S H RULES PURSUANT
TO T I T L E 4 1 . CHAPTER 6 FOR THE GRANT PROGRAM BEFORE THE ISSUANCE OF THE
I N I T I A L GRANT PROGRAM REQUEST FOR PROPOSALS. THE DIRECTOR O F THE DEPARTMENT
OF HEALTH SERVICES AND THE CONTRACTOR SHALL SIGN A CONTRACT BEFORE THE
TRANSMISSION OF ANY TOBACCO TAX AN0 HEALTH CARE FUND MONIES TO THE
CONTRACTOR.
I. I N ADMINISTERING THE B A S I C C H I L D R E N ' S MEDICAL SERVICES PROGRAM AND
AWARDING CONTRACTS ESTABLISHED PURSUANT TO T H I S SECTION. THE DIRECTOR OF THE
DEPARTMENT OF HEALTH SERVICES SHALL SEEK TO E F F I C I E N T L Y AND. EFFECTIVELY
COORDINATE THE DELIVERY OF SERVICES PROVIDED THROUGH THE PROGRAM WITH
SERVICES PROVIDED THROUGH OTHER PROGRAMS INCLUDING THOSE ESTABLISHED PURSUANT
TO CHAPTER 2. ARTICLE 3 Of TH! S T I T L E AND SECTIONS 3 6 - 2 9 0 7 . 0 5 AND 3 6 - 2 9 0 7 . 0 6 .
THE DIRECTOR SHALL SEEK TO ENSURE THAT T H I S COORDINATION RESULTS I N PROVIDING
FOR E I T H E R OR BOTH THE COVERAGE OF A D D I T I O N A L CHILDREN OR THE PROVISION OF
A D D I T I O N A L MEDICALLY NECESSARY SERVICES TO CHILDREN INSTEAD O F SUPPLANTING
E X I S T I N G SERVICE OPPORTUNITIES GR D U P L I C A T I N G E X I S T I N G PROGRAMS WITH NO
ATTENDANT INCREASE I N COVERAGE.
H. B. 2508
J . FOR THE PURPOSES OF THIS SECTION. " GRANT PROGRAM" REFERS TO THE
BASIC CHILDREN'S MEDICAL SERVICES PROGRAM.
Sec. 2. Section 36- 2921. Arizona Revised S t a t u t e s . i s amended t o read:
36- 2921. Tobacco t a x a l l o c a t i o n
A. Subject t o t h e a v a i l a b i l i t y o f monies i n t h e m e d i c a l l y needy
account e s t a b l i s h e d pursuant t o s e c t i o n 42- 1241, subsection C, paragraph 3
t h e a d m i n i s t r a t i o n s h a l l use t h e monies i n t h e account i n t h e f o l l o w i n g
o r d e r :
1. The a d m i n i s t r a t i o n s h a l l withdraw t h e amount necessary t o pay the
s t a t e share o f costs f o r p r o v i d i n g h e a l t h care services t o any person who i s
e l i g i b l e pursuant t o s e c t i o n 36- 2901, paragraph 4, s u b d i v i s i o n s ( a ) . ( c ) and
( h ) . - and who becomes e l i g i b l e f o r h e a r t . LUNG. HEART- LUNG. l i v e r or
auto1 ogous and a1 1 ogenei c bone marrow t r a n s p l ants pursuant t o section
36- 2907. subsection A, paragraph 11, SUBDIVISION ( d l as determined by the
a d m i n i s t r a t o r AND TO ANY PERSON WHO IS ELIGIBLE PURSUANT TO SECTION 36- 2901,
PARAGRAPH 4, SUBDIVISION ( b) AND WHO BECOME ELIGIBLE FOR LUNG OR HEART- LUNG
TRANSPLANTS PURSUANT TO SECTION 36- 2907, SUBSECTION A, PARAGRAPH 11,
SUBDIVISION ( b ) . AS DETERMINED BY THE ADMINISTRATOR.
2. Beginning on August 1, 1995 and on t h e f i r s t day of each month
t h e r e a f t e r . t h e sum of one m i l l i o n two hundred f i f t y thousand d o l l a r s s h a l l
be t r a n s f e r r e d from the m e d i c a l l y needy account t o t h e
~. . MED ICAL SERVICES s t a b i l i z a t i o n fund f o r uses as
p r e s c r i b e d i n s e c t i o n 36- 2922.
3. From and a f t e r August 1, 1995 and each year t h e r e a f t e r , the
a d m i n i s t r a t i o n s h a l l t r a n s f e r not more than f i f t e e n m i l l i o n d o l l a r s t o the
department o f h e a l t h services t o be a l l o c a t e d as f o l l o w s i f the department
awards a c o n t r a c t :
. .
,( a ) Up, :: C;,.. 3- tti. rtc:- 1c:; . t".- v-, ONE- THIRD o f the t o t a l amount
t r a n s f e r r e d . f o r t h e mental h e a l t h g r a n t program e s t a b l i s h e d pursuant t o
s e c t i o n 36- 3414.
( b ) 1 - : ; = 1 : c. le,, c ' 3 . - ONE- THIRD o f the t o t a l amount
t r a n s f e r r e d , f o r primary c a r e s e r v i c e s e s t a b l i s h e d pursuant t o section
36- 2907.05.
( C ) ? LL - ONE- THIRD o f the t o t a l amount
t r a n s f e r r e d . f o r grants t o the community h e a l t h centers e s t a b l i s h e d
pursuant t o s e c t i o n 36- 2907.06.
4 . From and a f t e r August 1. 1995. t h e a d m i n i s t r a t i o n s h a l l t r a n s f e r
up t o f i v e hundred thousand d o l l a r s annually f o r f i s c a l years 1995- 1996 and
1996- 1997 f o r p i l o t programs p r o v i d i n g d e t o x i f i c a t i o n services i n counties
having a p o p u l a t i o n of f i v e hundred thousand persons o r less according t o the
most recent United States decennial census.
H. B. 2 5 0 8
5. The a d m i n i s t r a t i o n s h a l l t r a n s f e r up t o two hundred f i f t y thousand
d o l l a r s annually f o r f i s c a l years 1 9 9 5 - 1 9 9 6 . 1 9 9 6 - 1 9 9 7 and 1 9 9 7 - 1 9 9 8 f o r
telemedicine p i l o t programs designed t o f a c i 1 i t a t e t h e p r o v i s i o n of medical
services t o persons 1 i v i n g i n medically underserved areas as &+ i+ ed PROVIDED
i n s e c t i o n 3 6 - 2 3 5 2 .
6 . THE ADMINISTRATION SHALL TRANSFER UP TO ONE HUNDRED F I F T Y THOUSAND
DOLLARS ANNUALLY BEGINNING I N FISCAL YEAR 1 9 9 6 - 1 9 9 7 FOR CONTRACTS BY THE
DEPARTMENT OF HEALTH SERVICES WITH NONPROFIT ORGANIZATIONS THAT PRIMARILY
A S S I S T I N THE MANAGEMENT OF END STAGE RENAL DISEASE AND RELATED PROBLEMS.
CONTRACTS SHALL NOT INCLUDE PAYMENTS FOR TRANSPORTATION OF PATIENTS FOR
D I A L Y S I S .
7. CONTINGENT ON THE EXISTENCE OF A PREMIUM SHARING DEMONSTRATION
PROJECT FUND. BEGINNING OCTOBER 1, 1 9 9 6 AND U N T I L SEPTEMBER 3 0 . 1 9 9 9 , THE
ADMINISTRATION SHALL WITHDRAW THE SUM OF TWENTY M I L L I O N DOLLARS I N EACH GF
FISCAL YEARS 1 9 9 6 - 1 9 9 7 . 1 9 9 7 - 1 9 9 8 AND 1 9 9 8 - 1 9 9 9 FOR DEPOSIT I N THE PREMIUM
SHARING DEMONSTRATION PROJECT FUND ESTABLISHED BY SECTION 36- 2923 TO PROVIDE
HEALTH CARE SERVICES TO ANY PERSON WHO I S E L I G I B L E FOR AN ARIZONA HEALTH CARE
COST CONTAINMENT SYSTEM PREMIUM SHARING DEMONSTRATION PROGRAM ENACTED BY THE
LEGISLATURE. THE ARIZONA HEALTH CARE COST CONTAINMENT SYSTEM PREMIUM SHARING
DEMONSTRATION PROGRAM ENACTED BY THE LEGISLATURE SHALL NOT BE AN ENTITLEMENT
PROGRAM.
8. SUBJECT TO THE A V A I L A B I L I T Y OF MONIES. THE ARIZONA HEALTH CARE COST
CONTAINMENT SYSTEM ADMINISTRATION SHALL TRANSFER TO THE DEPARTMENT OF HEALTH
SERVICES UP TO F I V E M I L L I O N DOLLARS ANNUALLY BEGINNING I N FISCAL YEAR
1 9 9 6 - 1 9 9 7 FOR PROVIDING NONENTITLEMENT FUNDING FOR A BASIC CHILDREN'S MEDICAL
SERVICES PROGRAM ESTABLISHED BY SECTION 3 6 - 2 9 0 7 . 0 8 . THE ADMINISTRATION MAY
ALSO WITHDRAW AND TRANSFER TO THE DEPARTMENT AMOUNTS FOR PROGRAM EVALUATION
AND FOR ADMINISTRATIVE COSTS AS PRESCRIBED I N SECTION 3 6 - 2 9 0 7 . 0 8 .
B. The department o f h e a l t h services s h a l l e s t a b l i s h an accounting
procedure t o ensure t h a t a l l funds t r a n s f e r r e d pursuant t o t h i s s e c t i o n are
maintained s e p a r a t e l y from any other funds.
C. The a d m i n i s t r a t i o n s h a l l annually withdraw monies from t h e
medically needy account i n the amount necessary t o reimburse t h e department
of h e a l t h services f o r a d m i n i s t r a t i v e costs t o implement each program
e s t a b l i s h e d pursuant t o subsection A of t h i s s e c t i o n n o t t o exceed two per
cent of the amount t r a n s f e r r e d f o r each program.
D. The a d m i n i s t r a t i o n s h a l l annually withdraw monies from the
medically needy account i n the amount necessary t o reimburse t h e department
of health services f o r t h e e v a l u a t i o n s as p r e s c r i b e d by s e c t i o n 3 6 - 2 9 0 7 . 0 7 .
E. The a d r n i n l s t r a t l o n s h a l l annually r e p o r t , no l a t e r than November
1 of each year. t o the j o i n t l e g i s l a t i v e o v e r s i g h t committee on the tobacco
tax and health care fund the annual revenues deposited i n the m e d i c a l l y needy
account and the estimated expenditures needed i n t h e subsequent year t o
p r o v i d e funding f o r s e r v i c e s p r o v i d e d i n subsection A, paragraph 1 o f t h i s
H. B. 2508
section. The a d m i n i s t r a t i o n s h a l l immediately r e p o r t t o t h e cochairs o f the
o v e r s i g h t committee i f a t any time t h e a d m i n i s t r a t i o n estimates t h a t t h e
amount a v a i l a b l e i n t h e m e d i c a l l y needy account w i l l not be s u f f i c i e n t t o
fund the maximum a l l o c a t i o n s e s t a b l i s h e d i n t h i s s e c t i o n .
Sec. 3. Section 36- 2922, Arizona Revised Statutes, i s amended t o read:
36- 2922. Medical services s t a b i 1 i z a t i o n fund: d e f i n i t i o n
A. S u b j e c t t o t h e a v a i l a b i l i t y o f monies as p r e s c r i b e d i n s e c t i o n
36- 2921. t h e
. . MEDICAL SERVICES
s t a b i l i z a t i o n fund i s e s t a b l i s h e d i n t h e s t a t e treasury. The a d m i n i s t r a t i o n
s h d l l a d m i n i s t e r the fund as d i r e c t e d by t h e j o i n t l e g i s l a t i v e budget
committee pursuant t o subsection 4& E o f t h i s s e c t i o n .
B. The fund s h a l l be used o n l y t o o f f s e t . . increases i n
the cost o f p r o v i d i n g l e v e l s o f services e s t a b l i s h e d pursuant t o t h i s a r t i c l e
provided t o persons who are determined t o be m e d i c a l l y i n d i g e n t pursuant t o
s e c t i o n 11- 297. m e d i c a l l y needy pursuant t o s e c t i o n 36- 2905 o r low income
c h i l d r e n pursuant t o s e c t i o n 36- 2905.03 as a u t h o r i z e d pursuant t o t h i s
s e c t i o n .
C. NOTWITHSTANDING SECTION 42- 1241 OR 42- 1242, THE FUND MAY ALSO BE
USED TO OFFSET INCREASES IN THE COST OF PROVIDING LEVELS OF SERVICES
ESTABLISHED PURSUANT TO THIS ARTICLE TO PERSONS ELIGIBLE FOR THOSE SERVICES
PURSUANT TO SECTION 36- 2901, PARAGRAPH 4. SUBDIVISION ( b ) I F THE INCREASE
RESULTS FROM A DECREASE IN FEDERAL FUNDING FOR LEVELS OF SERVICE INCLUDING
A DECREASE I N THE FEDERAL MATCH RATE FOR LEVELS OF SERVICE PROVIDED TO
PERSONS ELIGIBLE PURSUANT TO SECTION 36- 2901, PARAGRAPH 4. SUBDIVISION ( b ) .
& D. I f , d u r i n g a f i s c a l year, t h e a d m i n i s t r a t i o n determines t h a t
the amount t h e l e g i s l a t u r e a p p r o p r i a t e d f o r t h a t f i s c a l year f o r services . . provided t o persons who are determined t o be wd- i- mlf;. wet, metl+ d+
----'.. ELIGIBLE FOR SERVICES PURSUANT TO SECTION
36- 2901, PARAGRAPH 4, SUBDIVISION ( a ) . ( b ) . ( c ) OR ( h ) i s i n s u f f i c i e n t t o pay
f o r u n a n t i c i p a t e d increases i n t h e cost of p r o v i d i n g t h o s e s e r v i c e s , the
a d m i n i s t r a t i o n s h a l l provide w r i t t e n n o t i c e of the d e f i c i e n c y t o the
chairperson of the j o i n t l e g i s l a t i v e budget committee and the d i r e c t o r o f the
governor's o f f i c e of s t r a t e g i c planning and budgeting w i t h evidence
supporting the d e t e r m i n a t i o n o f d e f i c i e n c y .
E. On r e c e i v i n g n o t i c e under subsection & D o f t h i s section, the
chairperson o f the j o i n t l e g i s l a t i v e budget committee s h a l l c a l l a p u b l i c
committee meeting t o review the evidence of the d e f i c i e n c y presented by the
a d m i n i s t r a t i o n . A f t e r reviewing the evidence, t h e committee may recommend
t o the a d m i n i s t r a t i o n t o withdraw an amount from t h e fund t h a t i s equal t o
. . the d e f i c i e n c y t o pay the Y increases i n the c o s t o f p r o v i d i n g
l e v e l s o f s e r v i c e -..--..--':: G! , ; z w.
& F. For the purposes of t h i s section " l e v e l s o f s e r v i c e " means the
p r o v i d e r payment method01 ogy , e l i g i b i 1 i t y c r i t e r i a and covered services
e s t a b l i s h e d pursuant t o t h i s a r t i c l e AND i n e f f e c t on J u l y 1, 1993.
H. B. 2 5 0 8
S e c . 4 . T i t l e 3 6 . c h a p t e r 2 9 . a r t i c l e 1. A r i z o n a R e v i s e d S t a t u t e s . i s
a m e n d e d by a d d i n g s e c t i o n 3 6 - 2 9 2 3 , t o r e a d :
3 6 - 2 9 2 3 . P r e m i um s h a r i n q d e m o n s t r a t i o n D r o i e c t f u n d : D u r D o s e ;
e x ~ e n d i t u r e s : l a ~ s i n s : i n v e s t m e n t : d e f i n i t i o n
A. A PREMIUM SHARING DEMONSTRATION PROJECT FUND I S ESTABLISHED FOR
COSTS ASSOCIATED WITH AN ARIZONA HEALTH CARE COST CONTAINMENT SYSTEM PREMIUM
SHARING DEMONSTRATION PROJECT THAT I S TO PROVIDE UNINSURED PERSONS ACCESS TO
M E D I C A L S E R V I C E S PROVIDED BY SYSTEM PROVIDERS. THE FUND CONSISTS O F MONIES
DEPOSITED FROM THE MEDICALLY NEEDY ACCOUNT OF THE TOBACCO TAX AND HEALTH CARE
FUND PURSUANT TO SECTION 3 6 - 2 9 2 1 , SUBSECTION A. PARAGRAPH 6 AND PREMIUMS
COLLECTED FROM DEMONSTRATION PROJECT P A R T I C I P A N T S . THE ADMINISTRATION SHALL
A D M I N I S T E R THE FUND AS A CONTINUING APPROPRIATION.
0. BEGINNING ON OCTOBER 1, 1 9 9 7 , I F A PREMIUM SHARING DEMONSTRATION
PROJECT I S ESTABLISHED, THE A D M I N I S T R A T I O N SHALL SPEND MONIES I N THE FUND
THROUGH THE F I R S T QUARTER OF F I S C A L YEAR 2000- 2001 TO COVER DEMONSTRATION
PROJECT EXPENDITURES. THE A D M I N I S T R A T I O N MAY CONTINUE TO MAKE EXPENDITURES
FROM THE FUND. SUBJECT TO THE A V A I L A B I L I T Y O F MONIES I N THE FUND. FOR
COVERING PROGRAM COSTS INCURRED BUT NOT PROCESSED BY THE A D M I N I S T R A T I O N
DURING THE F I S C A L YEARS I N WHICH THE PROGRAM O F F I C I A L L Y OPERATED.
C. THE DIRECTOR MAY WITHDRAW NOT MORE THAN S E V E N T Y - F I V E THOUSAND
DOLLARS FROM THE FUND FOR THE F I F T E E N MONTH PERIOD BEGINNING JULY 1, 1 9 9 6 AND
ENDING SEPTEMBER 30, 1 9 9 7 TO COVER ADMINISTRATIVE EXPENDITURES RELATED TO THE
DEVELOPMENT OF A PREMIUM SHARING DEMONSTRATION PROJECT PROPOSAL OR ANY
PREMIUM SHARING DEMONSTRATION PROJECT ANALYSIS REQUESTED BY A COMMITTEE OF
THE LEGISLATURE.
D. MONIES I N THE FUND ARE EXEMPT FROM THE PROVISIONS O F SECTION 3 5 - 1 9 0
RELATING TO LAPSING OF APPROPRIATIONS. EXCEPT THAT A L L UNEXPENDED AND
UNENCUMBERED MONIES REMAINING ON OCTOBER 1. 2 0 0 1 REVERT TO THE MEDICALLY
NEEDY ACCOUNT OF THE TOBACCO TAX AND HEALTH CARE FUND.
E. THE STATE TREASURER SHALL INVEST THE MONIES I N THE FUND AND
INVESTMENT INCOME SHALL BE CREDITED TO THE FUND.
i . FOR PURPOSES OF T t i ! S SECTION. UNLESS OTHERWISE NOTED. " FUND" MEANS
THE PREMIUM SHARING DEMONSTRATION PROJECT FUND.
S e c . 5 . Laws 1 9 9 6 . f i F t h s p e c i a l s e s s l o n . c h a p t e r 5 . s e c t i o n 7 1 s
a m e n o e d t o r e a d :
S ~ C .7 . AHCCCS w l t h d ~ a w a 1 s : D u r D o s e s
N o t w i t h s t a n d i n g a n y o t h e r provision o f l a w , f o r s t a t e f i s c a l y e a r
1 9 9 6 - 1 9 9 7 . t h e A r i z o n a h e a l t h c a r e c o s t c o n t a l n m e n t s y s t e m a d r n l n ~ s t r a t i o n
s h a l l w l t h d r a w . a s n e c e s s a r y . t h e sum o f S 1 6 . 5 4 4 . 0 0 0 f r o m t h e m e d i c a l l y n e e d y
a c c o u n t o f t h e t o b a c c o t a x a n d h e a l t h c a r e f u n d e s t a b l i s h e d p u r s u a n t t o
s e c c i o n 4 2 - 1 2 4 1 . s u b s e c t i o n C . p a r a g r a p h 3. A r i z o n a R e v i s e d S t a t u t e s . s u b j e c t
t o t h e a v a l l a b i l ~ t yo f m o n i e s I n t h e a c c o u n t for the f o l l o w i n g p u r p o s e s a n d
t h e w i t h d r a w a l s s h a l l be made b e f o r e t h e w i t h d r a w a l s f o r t h o s e p u r p o s e s s e t
f o r t h i n section 3 6 - 2 9 2 1 . A r l z o n a R e v l s e d S t a t u t e s :
H . B . 2508
1. $ 10,000.000 to discontinue the annual ten million d o l l a r discount
on private hospital reimbursement required by Laws 1993, second special
session, chapter 6, section 39 as amended by Laws 1995, f i r s t special
session. chapter 5, section 10.
2. $ 4.522.800 to continue the scheduled phase- out of the quick payment
discount required by SECTIONS 8- 512, 36- 2903.01 AND 36- 2904, ARIZONA REVISED
STATUTES. LAWS 1992, CHAPTER 302, SECTION 14. AS AMENDED BY Laws 1993. second
special session, chapter 6. section 27 AND Laws 1995. f i r s t
special session, chapter 5. section 8- 6. AND LAWS 1993. SECOND SPECIAL
SESSION, CHAPTER 6. SECTION 29. AS AMENDED BY LAWS 1995. FIRST SPECIAL
SESSION, CHAPTER 5. SECTION 8.
3. $ 2.021.200 to replace federal funds reduced due to the lower
federal matching assistance percentage for federal f i s c a l year 1996- 1997 as
reported by the United States department of health and human services.
Sec. 6. Arizona health care cost containment svstem ~ remium
sharinu demonstrati on ~ r o . i e c t i m ~ elm entation
committee: recommendations
A. The Arizona health care cost containment system premium sharing
demonstration project implementation committee i s established to make
recommendati ons to the governor and the 1 egi s l ature regarding the
implementation of a premium sharing demonstration program to begin October
1. 1997. The committee shall use as the primary framework in developing
program recommendations the contents of House Bill 2508 and Senate Bill 1219
introduced during the second regular session of the forty- second l e g i s l a t u r e .
The commi t t e e shall recommend a program designed to allow e l i g i b l e persons
access to medical services provided by system providers through a cost
sharing arrangement w i t h the Arizona health care cost containment system
administration.
B . The president of the senate and the speaker of the house of
representatives shall each appoint three members of t h e l e g i s l a t u r e to serve
on the implementation committee. with no more t h a n two appointees from each
house representing the same political party. The president of the senate and
the speaker of the house of representatives shall each s e l e c t one of t h e i r
three appointees to be cochalrmen of the committee. The committee shall
provide a report of t h e l r recommendations to the governor, the president of
the senate. the speaker of the house of representatives. the secretary of
s t a t e , the dlrector of the department of l i brary. archives and public records
and the director of the Arizona l e g i s l a t i v e council by November 15, 1996.
C . When recommendlng eligibility c r i t e r i a for project p a r t ~ c i p a n t s .
the committee shall recommend the household income threshold for project
p a r t i c l p a t l o n t h a t s h a l l not exceed three hundred per cent of the federal
poverty guide1 ines published by the United States department of health and
human services. The committee shall also develop recommendations regarding
resource and asset thresholds for project e l i g i b i l i t y . E l i g i b i l i t y c r i t e r i a
H. B. 2508
recommendations shall also include provisions that require an applicant for
project services to be a l l of the following:
1. A United States citizen or a legal alien.
2 . A resident of t h i s s t a t e .
3. Uninsured for a period of a t l e a s t six months before application
for project services.
4. Meet a minimum resource t e s t established for the project.
D. The commi t t e e shall d i r e c t the Arizona health care cost containment
system administration to conduct a c t u a r i a l s t u d i e s t h a t provide estimates
relating to presentation rates a n d potential premium sharing costs based on
parameters recommended in this section and any other parameters the committee
e s t a b l i s h e s . The committee shall evaluate the f e a s i b i l i t y of devising
separate premium schedules based on d i f f e r e n t household s i z e s . A t the
direction of the committee. the Arizona health care cost containment system
administration shall provide d e t a i l s on the methodology for determining the
premium share cost for participants and the j u s t i f i c a t i o n for the methodology
used.
E . The committee shall evaluate the information obtained pursuant t o
subsections C and D of this section and shall recommend d e t a i l s on the
locations for the premium sharing demonstration project and the f e a s i b i l i t y
of limiting the number of project participants.
F . The committee shall recommend a service package t h a t shall be
de1 ivered through the Arizona health care cost containment system and may
include health care and hospitalization services similar to those provided
pursuant to section 36- 2907. Ari zona Revi sed S t a t u t e s . The commi t t e e may
consider a l t e r n a t i v e service packages for project p a r t i c i p a n t s .
G . The committee shall recommend the e n t i t y t h a t should be responsible
f o r c o l l e c t i n g the premiums a n d the method for collecting the premiums.
H . The committee shall ensure t h a t i t s recommendations for the
demonstration project clearly ~ n d ~ c a tt hea t :
1. The prov~ sions of the project to be implemented neither entail an
applicant's entitlement to project services nor obligate the Arizona health
care cos: containment systen i n a n y manner to provide coverage to persons
beyond the number that car De served by the resources specifically dedicated
by the legislature for the D - o j e c i .
2 . The dlrector of the Arizona health care cost containment system
administration sha'l use the monies available i n the premium sharing
demonstration project func. established by section 36- 2923. Arizona Revised
Statutes. i n a manner that ersures that the demonstration project can be in
o? eration over the perloc c' tlme beginning October 1. 1997 a n d ending
September 30. 2000.
3. The director of the Arlzona health care cost containment system
adminlstratlon shall administer the project and use any project control
mechanism available such as a n enrollment cap in a manner that ensures t h a t
H. B. 2508
1 the project does not r e s u l t in expenditures t h a t would exceed the monies
2 available in the premium sharing demonstration project fund, established
3 pursuant to section 36- 2923. Arizona Revised Statutes. as added by t h i s act.
4 I . For purposes of t h i s section. " project" means the Arizona health
5 care cost containment system premium sharing demonstration project t h a t i s
6 - to be designed and developed according to the provisions of t h i s section.
7 Sec. 7. Rules: exern~ tion
8 The department of health services i s exempt from the r u l e making
9 requirements of t i t l e 41, chapter 6, Arizona Revised S t a t u t e s , to implement
10 the requi rements of section 36- 2907 - 08. Arizona Revised S t a t u t e s . as added
11 by t h i s a c t . The department shall conduct public hearings, including a t
12 l e a s t two in counties with a population of l e s s than f i v e hundred thousand
13 persons according to the most recent United States decennial census, before
14 i t adopts exempted rules. The department shall publish adopted rules
15 pursuant to t i t l e 41, chapter 6. Arizona Revised S t a t u t e s .
16 Sec. 8. Delayed r e ~ e a l
17 Section 6 of t h i s act i s repealed from and a f t e r December 31, 1996.
18 Sec. 9. Conditional del aved r e ~ e a l
19 A. Section 36- 2923. Arizona Revised S t a t u t e s . as added by t h i s a c t ,
2 0 i s repealed from and a f t e r December 31. 1997 i f the premium sharing
2 1 demonstration project i s not implemented by t h a t date.
2 2 0 . If section 36- 2923. Arizona Revised Statutes. i s repealed pursuant
2 3 t o t h i s section, monies remaining in the premium sharing demonstration
2 4 project fund revert to the medically needy account of the tobacco tax and
2 5 health care f u n d established under section 42- 1241, Arizona Revised Statutes.
2 6 Sec. 10. Tobacco t a x a n d health care fund: t r a n s f e r of monies;
2 7 ~ D D ~ O aDt 1~ onI
2 8 Effective on October 1. 1996. the sum of $ 30.000.000 i s transferred
2 9 from the medically needy account of the tobacco tax a n d health care fund
3 0 established by section 4 2 - 1241. Arizona Revised S t a t u t e s . to the medical
3 1 services stabilization f u n d established by section 36- 2922. Arizona Revised
3 2 S t a t u t e s . a n d is appropriated to that f u n d . The s t a t e treasurer shall make
3 t h i s one- time t r a n s f e r .
- 10 -
: ForCornxnitteeonHealth For Caucus and Floor Action -
- For Committee on As Passed the House -
A R I Z O N A H O U S E OF R E P R E S E N T A T I V E S
SECOND REGULAR SESSION - 1996 I
BILL SUMMARY FOR HB 2508
premium sharing
Introduced by: Weiers, Knaperek, W a n
HI3 2508 amends statutes relating to the Arizona Health Care Cost Containment System ( AHCCCS)
state- bnded medically needylmedically indigent ( MN/ MI) program as follows:
M 9 ;
• Establishes a three year, medically needy premium sharing demonstration project ( MN)
beginning October 1, 1997 to serve persons who are " medically needy residents" by replacing
the current state- fbnded MNM program.
• Establishes criteria to define those MN members who shall pay a premium and those who
shall not as follows:
- A " medically needy resident," must have an annual individual income that does not
exceed $ 3200, or is between $ 3333 and $ 4266 if the person is living with a dependent
member of the hndy household or if married and living with a spouse. These persons
are not required to pay either a premium or copayrnent.
- A person who's annual income exceeds $ 3200, but is less than 300% of the Federal
Poverty Level ( FPL) may also apply for the MN program, but will be required to pay
a percentage of the premium as well as a copayrnent.
Maintains the current resource requirements for the new MN program, which require an
applicant's household net worth of resources not to exceed $ 50,000; for an individual
applicant who is married, any separate property of the applicant's spouse that does not
exceed $ 75,000 shall not be included in determining the net worth of the applicant's
resources.
• Removes the " spend down" allowance in determining eligibility. Currently, ari applicant may
apply his or her medical bills toward the income eligibility criteria. Under HB 2508, an
applicant's medical expenses will not be used to reduce the value of the applicant's annual
income.
• States that an applicant's annual income is calculated by multiplying by 4 the applicant's
estimated income immediately following the date of application for eligibility for the system.
Currently, in calculating ehgibility for county hospitalization and medical care of the indigent
sick, the annual income of an individual shall be determined by multiplying by 4 the income
for the three months immediately prior to application. The new method estimates an
applicant's true income prospectively for a more accurate determination.
Provides that a person who is eligible for services for the MNM program before the '
effective date of this act may continue to receive services rifler the effective date of this act
for the remaining period allowed at the time they were determined to be eligible. Once the
six- month cycle is complete, the person is eligible to reapply for the new program.
Retains current law which prohibits an applicant who, within three years before filing an
application for eligiiity, has lnmsfimed or assigned real or personal property with the intent
to make the applicant eligible for the system.
Allows a county board of supervisors to adopt a definition of medically indigent which
includes persons or fkmily households not defined as medically indigent pursuant to this bill.
Prohibits a person who voluntarily leaves the system from submitting an application for
coverage until at least six months have elapsed. Furthermore, a person is not eligible for
services under section 36- 2905 unless that person has not been covered by a health care
program for not less than six months.
Premium Sharing:
Requires the director to establish the premium sharing amounts based on an applicant's
income level and the number of persons in the household. The premium percentages increase
exponentially as income levels increase.
The Administration shall establish a method of collecting the medically needy premiums,
which shall be paid to the entity determined by the Administration. Premiums are due on
the first day of each month prior to the month in which coverage begins.
Retr& ve Cover-
* Removes retroactive coverage. Currently, the Administration is retroactively liable for
payment for care which was provided two days prior to the date that a county determined the
person's eligibility. Under HI3 2508, the Administration would not be liable for an
individual's emergency hospitalization and medical care provided before a person is enrolled
in a health plan.
Eligibility Standards:
Repeals the eligibility standards for medically indigent services since the MN $ 3200 income
h i t includes those currently defined as m& cally indigent with annual income below $ 2500.
Residency Requirements:
States that the rules adopted by the director of AHCCCS regarding residency requirements
shall require that state residency is only established if the applicant shows that hdshe has lived
in this state for a minimum of two consecutive years immediately before the date of
application.
Eliminates the special eligibility officer's authority to grant residency based on proofs of
residency other than those enumerated in statute, to an applicant who has relocated to this
state fiom another state or foreign country within six months before the date of application.
Currently, the special eligibility officer can waive the statutory proof- of- residency
requirements at hidher discretion and grant residency to an applicant based on some other
proof of credible evidence of residency.
!
Requires the Administration to adopt rules for the imposition of a $ 5 copayment for MN
persons for each physician's office visit or home visit. The rules may not provide for a waiver
of copayments in appropriate circumstances.
Tobacco-
Provides, beginning October 1, 1997, that the Administration shall withdraw $ 50,000,000,
subject to legislative appropriation, fiom the medically needy account to pay for providing
health care services to those persons eligible for the demonstration project.
)! $
i ~$ 2hmttshe appropriation of $ 1,250,000 per month to the stabilization fund. As a result,
this S30,000,000 will become part of the $ 50,000,000 used to pay for the MN program.
Removes the requirement that the Administration withdraw the amount necessary to pay the
state share of costs for providing health care senices to any person who is eligible under the
current statutes.
Prepared by: Lisa Blqck, Wendy Zolotor
Appendix B
Summary of Tobacco Tax Accounts
SUMMARY OF ACCOUNTS
Tobacco Tax and Health Care Fund
FUNDS AVAILABLE
Revenue
ALLOCATION
DOR Administration
Transfer to AHCCCS- MEDICALLY NEEDY
Transfer to DHS- HEALTH EDUCATION
Transfer to DHS- HEALTH RESEARCH
Transfer to DOC Corrections
TOTAL ALLOCATION
AIICCCS Accounts
FY 1996 FY 1997 AUTHORIZATION FOR USE + AHCCCS Medically Needy Account
FUNDS AVAILABLE
Balance Forward S39.369.600 S101,523,600
Transfer In - Tobacco Tax and llealth Care Fund 89,036,200 - 1
TOTAL FUNDS AVAILABLE 128,405,800 - 189-, 760,800
ALLOCATION
Offset Loss in Federal Funding
Phase- Down of Quick Pay Discount
$ 10 M Hospital Reimbursmemt
Transplants
Transfer to AHCCCS- Medical Services Stab Fund
Transfer to AHCCCS- Prmium Sharing Demo Project Fund
Transfer to DHS- h4edically Needy
TOTAL ALLOCATION
RALANCE FORWARD
+ AHCCCS Medical Services Stabilization Fund
FUNDS AVAILAL3I. E
Balance Forward
2.02l. 200 Authorized for FY 1997
4,522,800 Authorized for FY 1997
~ o, ooo, ooo Authorized Tor FY 1997
8,365,800 Permanent per 36- 292 1
46.91 2.500 Permanent per 36- 292 1
20,000,000 Authorized for FY 1997, 1998, 1999
2 1,422,000 ( See DliS sunmary)
pFiGq
Transfer In - AIiCCCS- Medically Needy 14,065,400 46.91 2.500
TOTAL FUNDS AVAILABLE S 14,065,400 560,977,900
+ AHCCCS Premium Sharing Demo Project Fund
FUN1) S AVAILABLE
Balance Fonvard
Transfer In - AHCCCS- hiedically Ncedy
TOTAL FUNDS AVAILABLE
AL1, OCATION
Administrative and Analysis Expenses
BALANCE FORWARD
Department of Health Services Accounts
+ DHS Health Education Account
FUNDS AVAILABLE
Balance Forward
Transfer In - Tobacco Tax and llealth Care Fund
TOTAL FUNDS AVAILABLE
ALLOCATION
Operating Subtotal
BALANCE FORWARD
+ DHS Health Research Account
FUNDS AVAILABLE
Balance Forward
Transfer In - Tobacco Tax and llealth Care Fund
TOTAL FUNDS AVAILABLE
AI, I, OCATION
Disease Control Research Cornrniss~ on
DAI. ANCE FORWARD
+ DHS Medically Needy Allocations
FUNDS AVAILAB1, E
Balance Forward
Transfer In - AIKCCS- Medically Needy
TOTAL FUNDS AVAILABLE
A1, LOCATION
Primary Care Programs
Qualifying Community Healffi Centers
Telemcdicinc
hlentnl Health Programs for Non- Title 19
Detoxification Services
Renal Disease htanagement
Basic Children's Medical Services Program
Evaluations
TOTAL FUNDS EXPENDED
FY 1996 FY 1997 AUTHORIZATION FOR USE
$ 1 2,938,400 $ 30,322,100
9,709,300 I 5,000,000 Pennanent per 42- 1244; FY 1996 and FY
1997 use limited by Laws 1995, Ch 275
407.900 5,067,200 I'ennanent per 36- 275, FY 1996 use
Iinlrted hy laws 1995, Ch 275
S7,9') 6. I00 59.23 1.600
Perrilarlcrlr per 36- 292 1
I'ernlancrlt per 36- 292 1
Authorized for I: Y 1996, 1997, 1998
I'erinlulcr~ t pcr 36- 202 1
A11t11orr7. cdf o ~ IC Y I000 uld I997
I'crrrlarlcrlt per 36- 202 1
I'crinnnent pr 36- 292 1
I'crrlianent per 36- 292 1
BALANCE FORWARD
Appendix C
AHCCCS Premium Sharing Proposal Estimated Impact
William Mercer, Inc.
AHCCCS - PREMIUM SHARING PROPOSAL ESTIMATED IMPACT
G:\ DAT\ AZOWVI\ PREMCVG. XLS 1211 1/ 96 17: 45
Goal: Quantify the Risk of the Proposed Program
A. Approach:
1.) Program Design
2.) Population
Eligibility CriteriaIProcess
Enforcement
Marketing
Premium Sharing
Existing Programs
Current Population Survey DataIHarris Survey
3.) Benefit Package Commercial
4.) Service Delivery Network AHCCCSIHealth Care Group
Commercial HMOsIFee For Service
MSA/ Catastrophic Coverage
William M. Mercer, Inc. Page 2 Government Health Care Practice
--- -
AHCCCS - PREMIUM SHARING PROPOSAL ESTIMATED IMPACT c
Goal: Quantify the Risk of the Proposed Prograrn
C. Process;
o Assurne Uninsured Average Cost approxi~ riatelye qual to Insured
o Determine Cost S t r u c t i ~ r eo f Uriinsurecl Popcllatiori
o I stilllate Presentatiot~ t ~ Cy o st Level
o [) eterrnirie Acljt~ stedA verage Cost
o Select Base Capitati011 f3ate
o Adjust for Differences w i t l l i t ~ B ase Capitatioll Rate
o Apply Selectiori
o Adjust for AgeISex Rate Structc~ re
h ' i l l i a n l h4, hlerccr, l ~ i c
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